InvestIdeas

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Wang Xing: the graduate school dropout behind China’s Meituan Dianping meal-delivery empire

Despite a series of early setbacks, internet entrepreneur Wang Xing has managed to build what is now considered as China’s leading on-demand services platform – Meituan Dianping

He introduced group-buying platform Meituan in 2010 amid the success of Groupon in the US. Backed by internet giant Tencent Holdings, it has expanded to become China’s biggest platform for on-demand services, including food delivery, after a merger with Dianping, which started out as a Yelp-like restaurant review site.

Meituan operates in 2,800 cities and counties in China and competes primarily with Alibaba’s Ele.me in on-demand delivery and Ctrip.com in hotel bookings.

Source: SCMP

https://www.scmp.com/tech/apps-social/a ... ery-empire

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According to the prospectus, 4M18 income aggregated RMB15.824 billion, up 94.89% yearly, while operating loss expanded from RMB769 million in a year ago's period to RMB2.526 billion.

Source: AAStocks Financial News

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DBS: MEITUAN-W (03690.HK)'s Valuation More Appealing than Peers

DBS Vickers issued a research report, pursuant to which it recommended investors to subscribe to the IPO of MEITUAN-W (03690.HK), which is a leading consumer service e-commerce platform in China.

Meituan Dianping's IPO valuation represents 2.3-2.7 times of 2020 sales income as compared with 2.9-9.4 times of its peers like Alibaba, said DBS Vickers, who believes Meituan Dianping's valuation is appealing.

Source: AAStocks Financial News

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<IPO News>MEITUAN-W (03690.HK) Meets HSI Fast Entry Rule

Hang Seng Indexes Company Limited announced that MEITUAN-W (03690.HK), who has fulfilled the Fast Entry Rule of the Hang Seng Composite Index, will be included into Hang Seng Composite Industry Index Information Technology, Hang Seng Composite LargeCap Index and Hang Seng Composite LargeCap & MidCap Index after market close on 5 October.

Changes in Hang Seng Internet & Information Technology Index will come into effect from 8 October.

Source: AAStocks Financial News

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<IPO News>MEITUAN-W: To Focus Resources on Catering-related Fields; Confident of Beefing up Mobike

MEITUAN-W (03690.HK) CFO Chen Shaohui said choosing Hong Kong as the listing destination reflects the company's confidence in its businesses, viewing the company is amid rapid growth of the lifestyle services industry in Mainland China, cementing market dominance after years of development.

As to online car-hailing, the CFO said the company will focus its resources on areas where growth potentials are higher with relation to catering.

Asked about collaboration with TENCENT (00700.HK), Chen said the company will beef up alliance with the latter, although the two have already been working together in numerous fields, such as traffic flow, payment, mapping and marketing.

In regards of Mobike, Chen voiced confidence there will be deep consolidation between Mobike and MEITUAN-W, and that the operation and financial position of Mobike can be further enhanced.

Source: AAStocks Financial News

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<IPO News>MEITUAN-W: To Focus Resources on Catering-related Fields; Confident of Beefing up Mobike

MEITUAN-W (03690.HK) CFO Chen Shaohui said choosing Hong Kong as the listing destination reflects the company's confidence in its businesses, viewing the company is amid rapid growth of the lifestyle services industry in Mainland China, cementing market dominance after years of development.

As to online car-hailing, the CFO said the company will focus its resources on areas where growth potentials are higher with relation to catering.

Asked about collaboration with TENCENT (00700.HK), Chen said the company will beef up alliance with the latter, although the two have already been working together in numerous fields, such as traffic flow, payment, mapping and marketing.

In regards of Mobike, Chen voiced confidence there will be deep consolidation between Mobike and MEITUAN-W, and that the operation and financial position of Mobike can be further enhanced.

Source: AAStocks Financial News

Meituan makes history with gigantic net loss

by Tereza Cai

Meituan Dianping (1690), the second listed stock with weighted voting rights after Xiaomi (1810), posted that its net loss widened 5.1 times from 2017 to 115.48 billion yuan (HK$134.82 billion) in 2018, the largest full-year losses of listed companies in local history.

It is partly due to the fair value changes of preferred shares, which increased to a loss of 104.6 billion yuan in 2018 from a loss of 15.1 billion yuan in 2017, resulting from a significant increase in the valuation of the company, which was determined by the offering price in the initial public offering in September 2018, the company said.

Total revenue rose 92.3 percent to 65.23 billion yuan.

As the world's largest food delivery service provider, its revenue from food delivery increased 81.4 percent year on year to 38.1 billion yuan, and in 2018, revenues from in-store, hotel and travel, increased 46 percent to 15.8 billion yuan.

Revenues from the new initiatives and others segment increased by 450.3 percent to 11.2 billion yuan in 2018, and gross margin was negative 37.9 percent in 2018, compared with positive 46 percent in 2017.

Its net losses for the fourth quarter widened 56.6 percent to 3.41 billion yuan, while the revenue surged 89 percent to 19.8 billion yuan.

During the three months, revenues from the food delivery segment increased 66.1 percent to 11 billion yuan, and revenues from the in-store, hotel & travel segment increased 48 percent to 4.6 billion yuan. Revenues from the new initiatives and others segments rocketed 462.1 percent to 4.2 billion yuan.

The half-year freezing period of Meituan Dianping is due next Wednesday, and may add pressure to its stock price.

Meituan completed the acquisition of Mobike in April 2018.

Chinese bike-sharing company Mobike, backed by Tencent (0700) said on Monday it will pull out of some Asian countries and re-evaluate its units in other overseas markets amid a wide-scale contraction in the market and the bankruptcy of top competitor Ofo.

The company, launched its orange bikes in Australia, Europe, and the United States, said it will lay off at least 10 staff as part of its restructuring plan.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 0312&sid=2

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MEITUAN(3690)

Analysis：

In the first half of 2019, Meituan Dianping achieved the best performance since its listing.

Benefiting from the strong growth of all business segments, Meituan Dianping second quarter of 2019 achieved revenue of 22.7 billion yuan, a year-on-year increase of 50.6%, maintaining a high growth trend.

In the second quarter of this year, Meituan Dianping successfully turnaround and achieved breakthrough progress, marking the company's entry into the profitable stage.

According to the financial report, the group`s adjusted EBITDA in the second quarter was 2.33 billion yuan, an increase of 407.9% from the previous quarter.

It was again positive after the previous quarter; the adjusted net profit was 1.49 billion yuan, which was Positive for the first time.

The operating performance of Meituan Dianping are also very strong.

As of June 30, 2019, the number of trading users of Meituan Dianping reached 423 million, an increase of 18.4% year-on-year;

The number of active businesses reached 5.9 million, an increase of 16.2%; the average annual transaction volume per user increased by 19.2% to 25.5.

In the first half of 2019, the two main business businesses of the Meituan Group, such as catering and food delivered, hotel and tourism, continued to maintain optimistic growth, and the leading edge in this industry will also become increasingly stable.

Strategy：
Buy-in Price: $73.50, Target Price: $80.00, Cut Loss Price: $67.00

Source: Phillips

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Meituan Dianping investor cuts stake

by Kevin Xu

Sequoia Capital China has sold 31.39 million shares in Meituan Dianping (3690), the Beijing-based website for food delivery services, consumer products and retail services.

The shares sold on October 10 constituted 0.62 percent of the total issued share capital and could have a value of HK$2.86 billion based on Meituan Dianping's share price of HK$91.15 that day.

Shares of Meituan Dianping rose 3.13 percent to HK$90.75 yesterday.

The second Hong Kong-listed stock with weighted voting rights, Meituan Dianping made its trading debut in September last year. Its shares have surged 120 percent in 2019.

Sequoia Capital has reduced its stake in Meituan Dianping five times since April, selling 910 million shares after the six-month lock-up period ended and cornerstone and pre-IPO investors could sell shares.

Meituan Dianping is set to be included in the Hang Seng Index, according to JPMorgan, while AAC Technologies (2018) is expected to be taken off.

And Meituan Dianping has collaborated with the China Association of the Blind for an app that allows visually impaired people to book deliveries by voice.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 1016&sid=2

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MEITUAN(3690)

Analysis：

It is the world's largest food and beverage delivery service provider and China's largest catering service platform.

Its Meituan Dianping, ranking first in the Chinese market since 2016, with a market share of 59.1% in 2018.

In 2017, the number of transactions was 5.8 billion, and the world's largest real-time distribution network has been built, covering 2,800 Chinese cities.

During the year, there were 4.4 million active merchants and 310 million transaction users.

The company's revenue for the three months ended September increased by 44.1% year-on-year to RMB27.49 billion.

The adjusted profit recorded RMB1.94billion, compared with an adjusted loss of RMB2.47 billion in the same period last year.

From 2013 to 2017, China's food consumption through consumer service e-commerce platform recorded a CAGR of 86.9%, and is expected to grow at a CAGR of 23.7% by 2023.

Strategy：
Buy-in Price: $106.30, Target Price: $122.00, Cut Loss Price: $84.00

Source: Phillips