Photo/Zhang Xiaoqing

Nov. 30 (NBD) – Stock price of selfie app developer Meitu (01357.HK) keeps plunging amid accusations of data privacy breaches from consumer watchdog.

Investors urgently sold 210 million HKD (26.8 million U.S. dollars) of Meitu's stock Thursday, and the price plunged by 15.9 percent to 3.39 HKD (43 cents) per share, according to Hong Kong Economic Times.

The price dived by 4.13 percent to close at 3.25 HKD (41 cents) Friday.

Previously Meitu's market value neared 100 billion HKD (12.7 billion U.S. dollars), but has decreased by 76 percent from the peak in January. 

Also on Thursday, a report by China Consumer Association (CCA) singled out Meitu for excessively collecting users' recognizable biological data such as face images and fingerprints and financial information, which could bring major hazards when exposed.

The CCA report, which assessed information collection and privacy policy of 100 apps, also pointed out that Meitu did not clarify responsibilities incurred when providing user data to third party. 

In response, Meitu insisted that it greatly values the protection of users' data and privacy and promised to abide by related laws and regulations when dealing with user information after ensuring users' informed consent.

The concern about user privacy serves only as a trigger of the stock plunge before which the unsatisfactory revenue and declining active users already sent Meitu on the downward track. 

Meitu reported revenue of 2.052 billion yuan (295.9 million U.S. dollars) for the first half of 2018, marking a 5.9 percent year-on-year decrease.

In terms of such vital index as user base, the number of Meitu's monthly active users of all its apps for the first half of 2018 stood at 349.9 million, marking a 16 percent decrease. 

Specifically, user base of its image processing app Meitu App and Beauty Camera decreased by 1.2 percent and 6.2 percent respectively, while its short video community Meipai dropped by a whopping 56.4 percent.

Meitu's namesake smartphone has been a major contributor to the company's revenue, but it has suffered continuing sales decrease. As leading domestic phone makers like OPPO, VIVO and Xiaomi are optimizing their camera technologies, Meitu's are losing its differential advantages in photo taking and editing.

On November 19 Meitu licensed its smartphone brand and a range of other smart hardware products to Xiaomi. The decision came as Meitu shifted to a "Beauty and Social Media" strategy, in which one key tactic is to transform the photo editing tool Meitu App into a social media community.

Meitu claimed that its short-term task is to pour investment to increase active users for the next 18 months but not to emphasize net profits.

When announcing cooperation with Xiaomi, Meitu released a profit warning that predicted a net loss of between 950 million yuan (137.0 million U.S. dollars) and 1.2 billion yuan (173.0 million U.S. dollars) for 2018.

Email: limenglin@nbd.com.cn