20220829-招银国际-美团-W-03690.HK-More_bullish_on_2H22E_recovery_and_profitability_4页_838kb

Meituan (3690 HK) Company Update Summary

Core Content

Meituan reported strong 2Q22 results, surpassing expectations with a revenue increase of 16% YoY and achieving a positive profit of RMB2.1bn, significantly above the consensus of -RMB2.2bn. The company's performance reflects improved margins across all segments and a resilient recovery in its business.

Key Financial Highlights

• Revenue Growth:

  • 2Q22: +16% YoY (5% above consensus)
  • FY23E: +28% YoY
  • FY24E: +25% YoY

• Net Profit:

  • 2Q22: RMB2.1bn (vs. consensus of -RMB2.2bn)
  • FY23E: RMB11,346mn
  • FY24E: RMB25,255mn

• Earnings Per Share (EPS):

  • 2Q22: RMB0.32 (vs. consensus of RMB0.38)
  • FY23E: RMB1.74
  • FY24E: RMB3.76

• Target Price (TP):

  • Updated to HK$278.0 (Previous TP: HK$263.0)
  • 12-month upside: +53.6% from current price of HK$181

Business Segments Performance

• Core Local Commerce:

  • 2Q22: +9% YoY
  • Expected 3Q22E growth: +13% YoY

• New Initiatives:

  • 2Q22: +41% YoY
  • Expected 3Q22E growth: +39% YoY

• Food Delivery (FD):

  • 2Q22: +5% YoY
  • FD orders rebounded at double-digit growth in July and August (estimated at 10%–20% YoY)
  • Forecasted 3Q22E revenue and orders growth: +26% / +17% YoY

• Instashopping:

  • 2Q22: +60% YoY
  • Forecasted 3Q22E orders: 450mn (up from 2Q22)
  • Revenue growth to surpass order growth by 7ppts

• In-Store & Hotel:

  • Expected 3Q22E revenue growth: +13% YoY
  • OPM (Operating Profit Margin) to continuously improve QoQ with reopening

Financial Forecast Revisions

CMBIGM raised its FY23-24E earnings forecast by 16%–33%, reflecting Meituan's resilient growth and margin improvement. The updated financial projections include:

• Revenue:

  • FY22E: RMB220,498mn
  • FY23E: RMB281,916mn
  • FY24E: RMB352,655mn

• Gross Profit:

  • FY22E: RMB52,826mn
  • FY23E: RMB70,239mn
  • FY24E: RMB91,354mn

• Operating Profit:

  • FY22E: -RMB6,034mn
  • FY23E: RMB5,800mn
  • FY24E: RMB20,886mn

• Adj. Net Profit:

  • FY22E: -RMB790mn
  • FY23E: RMB11,346mn
  • FY24E: RMB25,255mn

• Margins:

  • Gross Margin: 24.0% (FY23E) vs. consensus 25.6%
  • Operating Margin: 2.1% (FY23E) vs. consensus 1.2%
  • Adj. Net Margin: 4.0% (FY23E) vs. consensus 3.6%

Valuation and Investment Outlook

• SOTP Valuation:

  • Equity Value: HK$222.2bn
  • Target Price: HK$278.0 (FY23E)
  • P/S ratio: 3.4 (FY23E) vs. 4.3 (FY22E)

• Analyst Recommendation:

  • BUY
  • The company is viewed as one of the key players to benefit from lockdown relaxation, with strong momentum from new initiatives and positive margin outlook

Market and Share Information

• Market Cap: HK$1,062,393mn
• Average 3-month Turnover: HK$5,104.34mn
• 52-Week High/Low: HK$298 / HK$103.5
• Total Issued Shares: 5,509mn

Shareholding Structure

• Tencent: 19.25%
• BlackRock: 5.0%
• Baillie Gifford: 4.9%

Share Performance

• 1-month: -10.8% (Absolute) / -7.1% (Relative)
• 3-month: -1.8% (Absolute) / +2.9% (Relative)
• 6-month: -5.9% (Absolute) / +15.1% (Relative)

Analysts and Contact

• Sophie Huang: (852) 3900 0889 / sophiehuang@cmbi.com.hk
• Eason Xu: (852) 3900 0849 / easonxu@cmbi.com.hk

Auditor

• PwC

Key Ratios

• Sales Mix:

  • Food Delivery: 48.8% (FY24E)
  • In-Store, Hotel & Travel: 15.3% (FY24E)
  • New Initiatives: 35.9% (FY24E)

• Margins:

  • Operating Margin: +5.9% (FY24E)
  • Pre-tax Margin: +5.7% (FY24E)
  • Net Margin: +7.2% (FY24E)

• ROE: 11.5% (FY24E)

• ROA: 9.6% (FY24E)

CMBIGM Ratings

• BUY: Potential return of over 15% over next 12 months
• OUTPERFORM: Industry expected to outperform the relevant broad market benchmark over next 12 months

Important Disclosures

• The report is not an offer or solicitation to buy or sell any security.
• CMBIGM does not provide individually tailored investment advice.
• The information is based on publicly available data and is not guaranteed for accuracy or completeness.
• Past performance does not guarantee future results.
• The report is for the use of intended recipients only and may not be reproduced or distributed without prior written consent.

Regulatory Information

• The report is subject to distribution restrictions in the United Kingdom, United States, and Singapore.
• In the United States, the report is intended for "major US institutional investors" only.
• In the United Kingdom, it is only provided to persons falling within Article 19(5) or Article 49(2) of the relevant regulations.
• In Singapore, it is distributed by CMBISG and may be provided only to Accredited Investors, Expert Investors, or Institutional Investors.