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Aug. 23 (NBD) -- Chinese selfie and image editing app maker Meitu Inc (01357.HK) released its financial results for the first half of 2018 on Tuesday. 

The company first saw a decline in earnings this year since it was listed in Hong Kong. According to the report, the total revenue of Meitu fell by 5.9 percent to 2.05 billion yuan (300.1 million U.S. dollars) for the first six months of 2018, compared with 2.18 billion yuan (318.8 million U.S. dollars) for the same period of the previous year. 

Besides, its net loss reached 127.4 million yuan (18.6 million U.S. dollars), down 3.4 percent from 131.8 million yuan (19.3 million U.S. dollars) for the period of last year.

Headquartered in Xiamen, Fujian, the technology firm achieved business expansion in the Internet segment. In the first half of 2018, its revenue from the Internet business increased by 131.6 percent year over year.

However, the company experienced user loss during the period. Meitu's overall monthly active users (MAU) have decreased to 349.9 million in June 2018, declining 15.9 percent compared to 415.8 million in December 2017. Struck by short-video app Douyin, Weishi and other emerging platforms, Meipai's MAU plummeted to 42.8 million, less than half of the number at the end of last year.

The company ascribed user loss to factors such as download suspension of Meipai from various app stores in March and June 2018 as well as the increasing competition in the photo apps market.

NBD noticed that Meitu's lackluster earnings were mainly caused by the slump in smartphone sales. The revenue from smart hardware in the first six month of 2018 posted a year-on-year fall of 23.4 percent, and the number of smartphones sold decreased by 37 percent year over year to 533,260. 

Shares of the company plunged by 13.07 percent on Wednesday, closing at HK$4.19 (53.4 cents).

As Meitu's stock price kept tumbling in the past 7 months, its valuation has decreased by HK$35.8 billion yuan (4.6 billion U.S. dollars) as of August 22.

To lift up Meitu's share price, the company's chairman Cai Wensheng and CEO Wu Xinhong raised their holdings of the listed company separately since December last year. The app maker also completed a repurchase program for shares worth a total of no more than 100 million U.S. dollars. But the share price still went down this year.

With a setback during the competition with Douyin and Kuaishou, the firm is considering to tap users in the third- or fourth-tier cities, Cai Wensheng revealed at the press conference held Tuesday. 

Data show that young people living in towns have more spare time for entertainment than white collars in large cities. In China, the average working hours is up to 9.2 hours in Guangzhou and 8.9 hours in Hangzhou, but 44 percent of people in third- or fourth-tier cities worked less than 41 hours a week.

In addition, Meitu showed ambition to compete with WeChat and Weibo. The company added a social entry to its Meitu app in May this year, with plan to transform the photo taking app into a social platform.

Email: zhanglingxiao@nbd.com.cn