Meitu, a Hong Kong-listed Chinese technology company best known for its popular beauty apps, saw an RMB111,907, 000 (US$17.3 million) impairment loss on its Bitcoin holdings in the first six months of 2021, the company reported in its latest financial results.
Fast facts
- According to Meitu’s Aug. 25 HKEX filing: “the decrease in fair value of the acquired Bitcoin as of June 30, 2021 in the amount of approximately RMB111.9 million was recognised as impairment, while the increase in fair value of the acquired Ether as of June 30, 2021 in the amount of approximately RMB94.9 million was not recognised as revaluation gain.”
- “The impairment in relation to the acquired Bitcoin as of June 30, 2021 is reversible (whether in whole or in part) in the Group’s upcoming annual results for the year ending December 31, 2021 should there be a subsequent increase in the fair value of the Acquired Bitcoin as of the end date of the financial year,” Meitu added.
- Meitu had, on March 5, first purchased 15,000 Ether and 379.1214267 Bitcoin under the company’s “Cryptocurrency Investment Plan” that allows it to purchase up to US$100 million of cryptocurrencies. The company added 16,000 Ether and 386.08581655 Bitcoin to its crypto holdings on March 17 and another 175.67798279 Bitcoin on April 8. The company said in July that it had not sold any of its cryptocurrency holdings and had no plans to do so in the near future: “The Board believes that the blockchain industry is still in its early stage and that cryptocurrencies have ample room for appreciation in value over the long-term.”
- Like Meitu, other publicly-listed companies such as software giant MicroStrategy, electric carmaker Tesla, and Thai-listed financial consultancy The Brooker Group have reported crypto-related losses due to the fall in crypto prices in the second quarter of 2021 following a slew of negative news such as Elon Musk tweeting that Tesla would no longer accept Bitcoin for payment and China announcing its crackdown on Bitcoin mining and trading.
- The price of Bitcoin — the largest cryptocurrency by market value — reached an all-time high of US$64,000 in April, but dropped to US$35,000 on June 30. Bitcoin was trading at US$46,982 as of publishing time. The crypto market has since seen a recovery this month, with the total market value of cryptocurrencies crossing the US$2 trillion mark for the first time since May.
- Meitu’s stock price has been in decline since April and was trading at HK$1.76 as of publishing time.