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Chinese Beauty App Meitu Slides As Crypto Bets Increase Losses

Shares of Meitu Inc. extended its fall for a fourth day after the beauty app developer said it expected to widen its first-half losses due to the collapse cryptocurrency rates.

Shares in the Xiamen, Fujian state-based firm fell 8.7 percent in Hong Kong, the most in more than two weeks, after it said devaluations of bitcoin and ether were expected to triple year-on-year. The loss was disclosed in the stock market on Sunday, and the company is expected to publish its first-half results in August.

The maker of photo retouching apps was the first major firm in China to invest in cryptocurrencies, announcing in March 2021 that it had completed $40 million in initial transactions. In the months that followed, investments in bitcoin and ether rose to about $100 million as the company said the assets could help diversify its portfolio.

Crypto Star Rise in recent years came to an abrupt halt this year after hawkish actions by the Federal Reserve and increased regulatory scrutiny sent prices tumbling. Ethereum is down more than 70 percent this year after surging 400 percent in 2021, while bitcoin is down nearly 60 percent.

In recent years, Meitu has faced increased competition from firms including ByteDance Ltd. and Xiaomi Corp. Meitu’s total number of monthly active users has fallen 12 percent in 2021, and the firm is now trading at just over 10 percent of its debut price. It has yet to turn a profit since its landmark initial public offering nearly six years ago. The stock has fallen nearly 40 percent this year.

Losses for the first half are expected to reach 349.9 million yuan ($52 million), compared with a $45.6 million crypto impairment, which the firm cited as the main reason for the profit decline.

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https://www.businessoffashion.com/news/china/chinese-beauty-app-meitu-slides-as-crypto-bets-steepen-losses/ Chinese Beauty App Meitu Slides As Crypto Bets Increase Losses

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