Meituan 3690

[winston]

<Research Report>JPM: MEITUAN-W Near-term Selling Pressure May Linger; Investors Should Begin to Buy on Dip

In JP Morgan' view, the guidance on food delivery platforms’ responsibility to protect delivery riders’ interests published by the seven Chinese government departments will undermine investment sentiment and create near-term selling pressure, whereas the investment sentiment on the entire sector is rather vulnerable in the current environment.

The broker assumed the food delivery profit target of MEITUAN-W (03690.HK) in 2025 remains achievable effortlessly with potential upside and is estimated to support valuation.

Meanwhile, the near-term selling pressure will linger, JP Morgan opined, saying investors could accumulate the stock on dip.

The rating on MEITUAN-W was Overweight with target price of $400.

Source: AAStocks Financial News

[winston]

not vested

Wall Street Journal said Chinese authorities are readying a US$1 billion fine on Meituan under the antitrust law.

Source: SCMP

[winston]

not vested

China said to plan US$1b antitrust fine for Meituan

by Zheping Huang

The State Administration for Market Regulation could announce the penalty in coming weeks and the figure could still change ahead of the final decision.

The company will be required to revamp its operations and end its exclusivity arrangements with merchants known as “pick one from two”.

Nomura analysts had previously estimated Meituan will have to fork over 4.6 billion yuan (US$711 million), based on Alibaba’s punishment, which was roughly 4% of the larger firm’s 2019 sales.

Under antitrust laws, Meituan could have faced a penalty of as much as 10% of its revenue if it’s found to have violated regulations.

Source: Bloomberg

https://www.theedgemarkets.com/article/ ... ne-meituan

[winston]

vested

Brokers: Meituan Interim Adj. Net Loss May Top RMB8B; Focus on Regulation, New Biz Guidance

MEITUAN-W (03690.HK) will unveil the interim results on 30 August.

According to brokers' forecasts as compiled by our reporters, the firm's 1H21 non-IFRS adjusted net loss may range RMB6.629-8.987 billion, against 1H20 adjusted net profit of RMB25.02 billion.

The median forecast is a loss of RMB8.035 billion.

The market will focus on the data platform impact from China's regulatory policy, and Meituan's new business operation strategy in the next few quarters.

Related NewsRatings, TPs on MEITUAN-W (03690.HK) (Table)

-----------------------------------------------------

Brokers│1H21E Non-IFRS Adj. Net Loss (RMB)
Macquarie│6.629 billion
ICBCI│6.719 billion
UBS│6.729 billion
Citigroup│7.303 billion
CICC│7.586 billion
BOCOMI│8.535 billion
Morgan Stanley│8.633 billion
CMBI│8.692 billion
Goldman Sachs│8.987 billion

Based on 1H20 non-IFRS adjusted net profit of RMB25.02 billion.

Source: AAStocks Financial News

[winston]

vested

M Stanley Forecast on MEITUAN-W (03690.HK) Interim Result 2021 (Table)

Morgan Stanley published a report in mid-July, laying out its forecast for MEITUAN-W (03690.HK)'s interim results for 2021:

Items|1H21E (RMB)| YoY change
Total revenue│78.534 billion│+89.3%
Gross profit│16.921 billion│+97.3%
Net loss│10.7 billion│Profit->loss
Non-IFRS adjusted net loss│8.633 billion│Profit->loss

Source: AAStocks Financial News

[winston]

not vested

Meituan (3690.HK) Expect in-line 2Q but slightly cautious outlook for 3Q

Meituan will report its 2Q21 results on 30-Aug.

We expect total revenue +74% YoY to Rmb43 bn. Adj. net loss is expected at Rmb3.7 bn, mainly due to investments in Meituan Select.

By segment:

Food delivery revenue is expected to be +60% YoY, mainly driven by volume growth (+59% YoY). Unit OP is expected to increase QoQ to Rmb0.61 on better seasonality.

Instore and hotel segment is expected to see sequential recovery with revenue +88% YoY and adj. OP of Rmb3.4 bn.

New initiatives adj. op loss may widen to Rmb9.8 bn, including c.Rmb7 bn loss from Meituan Select.

We see a slightly more cautious outlook for 2H amid:
(1) impact on food delivery UE on increased labour protection;
(2) recent COVID resurgence hurting instore and hotel;
(3) investment in Meituan Select but volume may be slower into summer and due to regulatory control; and
(4) investment into other new business, e.g.. ride hailing.

*We lower our 2021/22 estimates by 43%/45% on more conservative food delivery UE assumptions, impact from COVID resurgence in 3Q, and investment in ride hailing.

We cut our TP to HK$313.00 (from HK$374.00).* Maintain OUTPERFORM.

Source: CREDIT SUISSE

[winston]

not vested

Meituan slips into red amid probe

by Aiden He

Meituan (3690) has come under investigation because of an earlier acquisition of bike-sharing company Mobike.

It reported a net loss of 8.2 billion yuan (HK$9.87 billion) for the first half,

Revenue nearly doubled to 80.78 billion yuan, but the cost of revenues also soared 1.21 times, resulting in a drop of 8.8 percentage points in gross profit margin to 24.4 percent.

Second-quarter revenues increased by 77 percent to 43.8 billion yuan, of which income from the segment of new initiatives and others increased by 1.13 times to 12 billion yuan.

In 2018, Meituan acquired Mobike for US$2.7 billion (HK$21.06 billion), including 65 percent cash and 35 percent of its stock.

Meanwhile, another investigation by the administration on Meituan under the anti-monopoly law started in April and is ongoing.

Source: The Standard

https://www.thestandard.com.hk/section- ... amid-probe

[winston]

not vested

Meituan (3690 HK)
2Q21: Solid Core Business Performance; To Empower The Spirit Of “Common
Prosperity”

Meituan reported solid 2Q21 results.

Total revenue grew 77% yoy to Rmb43.8b, 3-4% higher than our and consensus estimates.

The company delivered adjusted operating loss and adjusted net loss of Rmb3.1b/Rmb2.2b respectively as a result of widened losses from its NIO segment as well as higher S&M spending.

Management guided that the SAMR investigations are still ongoing and it remains uncertain on the timing and amount of the fines.

We maintain HOLD with a higher target price of HK$242.00.

Source: UOBKH

https://research.uobkayhian.com/content ... de74d69035

[winston]

not vested

Meituan (3690 HK): <Earnings First Take> 2Q21 beats with smaller-than-expected net loss [BUY, TP: HK$417.00]

Adjusted net loss of Rmb2,217m, vs. market expectations of c.Rmb4bn loss

Revenue grew by 77% y-o-y to Rmb43,759m, slightly ahead of market expectations

Food delivery and in-store, hotel and travel segment revenue increased by 59% and 89% respectively

Expect positive share price reaction in the near-term

Source: DBS

[winston]

not vested

MEITUAN (3690 HK)

Recommendation : BUY
Fair Value : HKD 316.00

GREAT 2Q21, WHILE HEADWINDS LOOK MANAGEABLE.

Strong quarter, though 3Q21 could see some headwinds in core segments

Labour cost increase for food delivery likely manageable; reassessing pricing strategy for Meituan Select

FV of HKD316 (from HKD355 previously)

Meituan’s 2Q21 results came in above expectations.

Total revenue grew 77% YoY to RMB43.8b, or 3% above consensus.

The food delivery Gross Transaction Volume (GTV) grew by 60% YoY while the average ticket size was stable. Adjusted net loss was RMB2.22, vs. consensus at -RMB4.04.

Looking ahead at 3Q21, management does expect some headwinds arising from core segments of Food delivery and In-store, hotel & travel segments due to the recent extreme weather and the wave of Covid-19 cases.

On Food delivery, management believes labour cost increase for platforms should be manageable, as policy intention is likely to strike a balance between labour protection and job creation.

Management is keeping to its long-term EBIT per order of RMB1.0 on the back of a few levers, such as a higher monetization ratio (resulting from a lower subsidy rate), higher advertising revenue and more cost-efficient delivery methods.

Following adjustments, including more conservative assumptions and a 10% ESG premium, our FV drops from HKD355 to HKD316.

Source: OCBC