UPDATE 1-China's selfie app Meitu reports smaller loss in 2016

Sijia Jiang

(Corrects paragraph 9 to say revenue from "internet and others"

business grew 40.1 percent last year, not 6.6 percent)

* Net loss narrows to 540.5 mln yuan

* Revenue rises to 1.58 bln yuan

* Stock gained around 80 pct since December IPO

HONG KONG, March 24 (Reuters) - Chinese photo app and mobile

phone maker Meitu Inc said annual net loss narrowed 24

percent last year, in its first earnings results since its

landmark debut in Hong Kong.

Meitu, known for its popular selfie beautifying apps, on

Friday reported a net loss of 540.5 million yuan ($78.5 million)

in 2016, down from 710 million the previous year. Revenue grew

to 1.58 billion yuan, from 742 million yuan.

Despite being known for its smartphone apps that let users

retouch and beautify selfies and other photos, sales of its

smartphones accounted for 93 percent of Meitu's revenue in 2016.

Xiamen-based Meitu listed on the Hong Kong market in

December in a rare floatation for unprofitable companies,

fetching $630 million in the IPO. That was Hong Kong's largest

tech IPO in a decade.

Meitu shares have since gained around 80 percent, closing at

HK$15.50 on Friday. Shares traded wildly this week, sparking

concerns of cross-border speculation.

Meitu this month was among a list of stocks included in a

new trading link between Hong Kong and mainland China.

"That is setting the market up for a bit of hangover when

the numbers come," said Ryan Roberts, a senior research analyst

at Hong Kong-based advisory MCM Partners.

"Investors that have been buying it up on the brand name or

the sexiness of the streaming video business, when they see a

big profit hit in the second half that could be problematic for

the stock," he said before Meitu's results were announced.

The company said revenue from its "internet and others"

business grew 40.1 percent last year to 104.7 million yuan,

while its operating loss was 652.2 million yuan.

Monthly active users grew 32 percent to a record high of

around 520 million in January 2017, it said.

"We are on track to launch Pushion, our fashion-focused

social e-commerce platform in the first half of 2017, adding

another avenue to e-commerce monetization," co-founder and

chairman Cai Wensheng said in a filing.

($1 = 6.8860 Chinese yuan renminbi)

(Reporting by Sijia Jiang; Editing by Randy Fabi)