Meitu Inc. soars 13%, Deutsche Bank sees good prospects for its cooperation with Alibaba.

On May 21, Meitu Company opened high in the morning, with its stock price hitting a new high in nearly 7 years, closing at 6.69 Hong Kong dollars, up 13.39%, with a total market value exceeding 30.5 billion Hong Kong dollars. In terms of news, Meitu announced that it had signed a 250 million US dollar convertible bond agreement with Alibaba. Alibaba invested in Meitu in the form of convertible bonds, with a total principal amount of 250 million US dollars, a term of 3 years, and an annual interest rate of 1%. Alibaba can exercise the conversion right within the 5 working days before the expiration date, converting to Meitu stock at a price of 6.00 Hong Kong dollars per share. The announcement shows that Meitu and Alibaba will cooperate strategically in the fields of e-commerce platform, AI technology, and cloud computing. Alibaba will prioritize promoting Meitu's AI e-commerce tools on its e-commerce platform, assist Meitu in developing new tools and functions driven by data for e-commerce images and videos, and provide computational support for Meitu's core business. Meitu has promised to purchase cloud services from Alibaba worth no less than 560 million yuan in the next three years. In response, international investment bank Morgan Stanley believes that through cooperation with Alibaba's e-commerce ecosystem, Meitu can better develop and promote its productivity tools such as Meitu Design Studio, and the long-term growth prospects of Meitu will be more optimistic. This cooperation also indicates that the relationship between Meitu and Alibaba in the fields of AI image, AI video, and AI design is cooperation rather than competition. The bank reiterated its "overweight" rating.