Meituan 3690

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vested

Meituan (3690 HK)
2Q23: Earnings Beat; ISHT As Key Growth Pillar In 3Q23

Meituan’s 2Q23 earnings exceeded expectations.

Total revenue grew 33.4% yoy to Rmb68b, in line with consensus estimates.

Non-IFRS net profit was Rmb7.7b, which translated to a non-GAAP net profit margin of 11.3%.

For 3Q23, Meituan expects growth in food delivery volume to alleviate due to tempered macro recovery and unfavourable weather conditions.

We expect ISHT to maintain its rapid recovery trajectory in 3Q23 given strong seasonality.

Maintain BUY with a higher target price of HK$210.00.

Source: UOBKH

https://research.uobkayhian.com/content ... 505dc3020c

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Brokers│Views

CLSA│2H23 revenue expected to maintain over 20% YoY growth despite lingering macro uncertainties

BOCOM International │In-store & hotel business charted robust growth; advertising & marketing driven by increasingly active merchants

Goldman Sachs│2Q23 core local commercial profit beat; positioning in in-store market stabilized with proactive strategies

UBS│Last quarter results decent; yet widening Youxuan losses may sap investor confidence

Nomura│Management forecast 3Q23 in-store business revenue to grow 30-33% YoY, in line with expectations

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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vested

Earnings First Take: Earnings beat market expectations by 68% on higher margin of core local commerce (+ve)

2Q23 revenue grew by 33% y-o-y to Rmb57bn, with core local commerce increasing by 39%

Adjusted net profit was Rmb7.7bn, 68% higher than market expectations due to stronger margin of core local commerce

Strong earnings performance demonstrates that impact from competition with Douyin is less severe than market feared

2Q23 revenue in line, earnings beat market expectations by 68%.

Meituan (3690 HK) announced its 2Q23 results on 24 Aug 2023 after market close.

Revenue increased by 33% y-o-y to Rmb68bn, in line with market expectations.

Segment-wise, core local commerce revenue increased by 39% y-o-y to Rmb51.2bn; revenue for the new businesses segment increased by 18% y-o-y to Rmb16.8bn.

Gross margin increased by 6.8ppt to 37% in 2Q23, from 2Q22’s 30.6%, mainly driven by lower rider cost due to sufficient supply and revenue mix change.

Operating profit of local commerce surged by 35% y-o-y to Rmb11.1bn, with the operating margin reaching 22%, mainly driven by strong order volume growth in food delivery.

Operating loss of the new businesses segment (including Meituan Select) narrowed by 24% y-o-y to c.Rmb5bn, mainly due to less subsidies for user acquisitions.

Adjusted net profit was Rmb7.7bn in 2Q23 (vs. Rmb2.5bn in 2Q22), beating market expectations by 68%, with net margin reaching 6.4% in 2Q23. (vs. 4% adjusted net margin in 2Q22).

Strong growth momentum to sustain in 2H23, competition better than feared. We expect a positive share price reaction to the strong 2Q23 results.

The strong beat in earnings was mainly due to the better-than-expected improvement in the core commerce margin, led by a strong rebound in order volume of food delivery and larger revenue contribution of high-margin in-store business.

In 2Q23, GTV of in-store hotel and travel business surged by 120% y-o-y and annual active merchants and transacting users hit new highs. We believe Meituan will continue to benefit from the sustained recovery in catering and offline consumption scenarios in 2H23.

We reiterated our view that competition in food delivery and the local service industry is moderating and less severe than what the market feared.

This is supported by Meituan's 35% operating profit growth of core commerce this quarter, which showcases its strong capability to effectively navigate the competitive landscape.

The company is trading at an undemanding valuation of 2.9x P/S, 1.2 S.D. below the historical average. We currently rate BUY with TP of HK$230.

Source: DBS

https://www.dbs.com/insightsdirect/comp ... cid=15780#

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Temporary revenue growth slowdown in 3Q23F

Revenue grew 33.4% yoy to Rmb68bn in 2Q23, largely in line with our expectation,
driven by strong recovery in core local commerce revenue (+39.2% yoy).

Adjusted NP reached Rmb7.7bn in 2Q23, a beat, due to reduced riders costs, admin
and R&D expeneses, and narrowed losses for new initiatives.

Management said in the call that food delivery revenue growth yoy would slow down
in 3Q23F, but growth of insta-shopping and in-store/hotel business to remain strong.

We expect Meituan to deliver topline growth of 22% yoy in 3Q23F (23% and 18% yoy
for core commerce and new businesses), and its adjusted NP to grow by 24.7% yoy.

Reiterate Add, with a higher DCF-based TP of HK$275

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 317E6EEC3D

[winston]

Vested in Meituan

Douyin to Expand Food Delivery Services to 24 Cities Incl. SZ This Mth

In order to better meet the demand of group buying and delivery merchants and strengthen local operations and promotional capabilities, Douyin's lifestyle services unit recently released a "Public Notice of Group Buying Delivery Regional Agent Information."

According to the notice, in September, Douyin's group buying and delivery services will be further expanded to cover 24 additional cities, including Shenzhen, Fuzhou, and Wuhan, building upon the existing presence in six cities such as Beijing, Shanghai, and Chengdu.

At the moment, group buying and delivery services offered by Douyin lifestyle services are available in 30 cities, indicating that the company will speed up its business deployment in segments such as food delivery and local life services.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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Meituan Troubles Are Piling Up Even After 40% Slump

by Jeanny Yu

Global active fund managers offloaded $3.7 billion of the company’s shares this year, making it the most-sold China tech firm during the period.

For one, the company needs to boost spending to complete with ByteDance Ltd. and fund its loss-making group-buying platform, where a number of buyers can purchase products together to secure deeper discounts.

Margins in its core delivery business are coming under pressure given the growing competition in the field.

In August, Meituan even warned of slower growth in food delivery orders in the third quarter due to concerns about the economic outlook and extreme weather.

Meituan is unlikely to keep growing at its targeted pace without offering discounts, which will hurt profitability,

Source: Bloomberg

https://finance.yahoo.com/news/meituan- ... 00685.html

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Meituan Posts Third Straight Profit After Chinese Travel Grew

by Sarah Zheng

Sales rose 22% to 76.5 billion yuan ($10.7 billion) in the quarter ended September, compared to an average projection for 76.01 billion yuan.

Net income almost tripled to 3.59 billion yuan.

Order volumes would slow this quarter, given short-term headwinds from the macroeconomy and extreme weather.

Expanded into adjacent areas like grocery retailing and group-buying, although in March it abandoned its costly self-operated ride-hailing service. As the domestic e-commerce rivalry heats up, Meituan has deepened its investments in short video and live-streaming to compete with upstarts like ByteDance Ltd’s Douyin.

Source: Bloomberg

https://finance.yahoo.com/news/meituan- ... 24190.html

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MEITUAN 3Q Non-IFRS Adj. NP Grows 62.4% YoY to RMB5.73B, Topping Forecast

MEITUAN-W (03690.HK) announced its results for the third quarter ended September 2023.

It recorded a net profit of RMB3.593 billion, up 1.95 times year-on-year, and higher than the profit of RMB2.4-3.502 billion as predicted by three brokers consolidated in this website.

On a non-IFRS basis, an adjusted profit of RMB5.727 billion was recorded, representing a 62.4% year-on-year increase, which was higher than the forecasted adjusted profit of RMB4.823-5.695 billion by the eight brokers consolidated in this website.

The adjusted EBITDA gained 28.9% year-on-year to RMB6.189 billion.

During the period, revenue amounted to RMB76.467 billion, representing a 22.1% year-on-year growth.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

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Meituan cautious as profit triples

by Themis Qi

Tripled its net profit to 3.59 billion yuan (HK$3.93 billion).

Growth in its main meal delivery business should slow this quarter and spending on promotions rise.

Expects diners to take advantage of atypically warm weather to dine out, even as the macroeconomic environment remains weak.

Revenue from in-store, hotel booking, and travel sector businesses benefited from a domestic travel rebound over the summer with transaction volume rising 90 percent year-on-year.

Source: The Standard

https://www.thestandard.com.hk/section- ... it-triples

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Broker│Opinion

Jefferies│Maintains long-term bullish view

Citi│Quarterly revenue broadly in line with expectations

CLSA│Sustainable and healthy growth

JPMorgan│Financial outlook deteriorated due to macro and investment impacts

Nomura│Quarterly results in line, but 4Q guidance weak

BOCI│Efficiency improvement

Goldman Sachs│Mixed quarterly results

UOB Kay Hian│Solid quarterly results

Huatai Securities│Moving forward amidst challenges

Haitong International│Pressure in the current quarter

UBS│Quarterly results in line, more investments may drag down profitability

Morgan Stanley│Uncertain growth and profitability outlook

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN