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Meitu announces impairment loss due to cryptocurrency investment

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It is reported that Meitu announced on the Hong Kong Stock Exchange that since the purchase of cryptocurrency, the Group has not purchased or sold any cryptocu…

Meitu announces impairment loss due to cryptocurrency investment

It is reported that Meitu announced on the Hong Kong Stock Exchange that since the purchase of cryptocurrency, the Group has not purchased or sold any cryptocurrency according to the cryptocurrency investment plan. According to the International Financial Reporting Standards, the Group is expected to recognize an impairment loss of about 285 million yuan in the annual performance of the Group as of December 31, 2022 for the purchased cryptocurrency. The impairment loss of the purchased cryptocurrency hedges the impact of the fair value gains of some financial assets measured at fair value and the changes of which are included in the current profit and loss on the net profit of the group.

Meitu: The confirmed impairment loss of cryptocurrency is about 285 million yuan

Interpretation of the news:


Meitu, a popular Chinese video and photo editing app, has announced that it has not purchased or sold any cryptocurrency since its initial investment. However, due to a decline in the value of cryptocurrency, the company expects to recognize an impairment loss of about 285 million yuan in its annual performance as of December 31, 2022. This move indicates that the company’s investment in cryptocurrency has not been fruitful, and it may have to bear the losses.

According to the International Financial Reporting Standards, Meitu is obligated to recognize such impairment losses for any assets that have lost value. This applies to cryptocurrencies as well. The impairment loss that Meitu is anticipating is expected to offset the impact of any fair value gains on some financial assets measured at fair value. Any changes in these assets would be included in the current profit and loss net profit of the company.

Meitu’s announcement comes as a surprise to the cryptocurrency world. The company had previously invested in cryptocurrencies to diversify its portfolio and gain exposure to the growing cryptocurrency market. However, the recent volatility in the crypto market has led to a significant decline in the value of cryptocurrencies.

The announcement also highlights the importance of appropriate investments and risk management strategies. While investing in cryptocurrencies may seem like a lucrative opportunity, it is important to understand the risks and potential losses associated with it. Meitu’s experience serves as a cautionary tale for other companies that are considering investing in cryptocurrencies or other volatile assets.

In summary, Meitu’s announcement regarding cryptocurrency investment is a reminder of the risks involved in investing in volatile assets such as cryptocurrencies. The impairment loss that the company is expected to incur indicates that the investment has not been successful for the company. Hence, it is important to assess the risks and potential losses before making any investments.

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