20180803-中国银河国际证券-COMPANY_NEWS__TMT_INDUSTRY_UPDATE_–_The_IPO_for_eating_and_living_8页_831kb

Meituan Dianping IPO Summary

Core Content Overview

Meituan Dianping is a leading Chinese e-commerce platform for service-based businesses, offering a diverse range of services to consumers and merchants. Founded in 2010, the company has grown significantly and is preparing for its IPO, which is expected to be one of the largest listings for a Chinese Internet company in 2018. The report aims to provide investors with a comprehensive understanding of Meituan Dianping's business model and financial performance.

Main Business Segments

Meituan Dianping's business is categorized into three major segments:

1. Delivery and O2O Local Lifestyle Services

   • Includes food delivery, in-store dining, hotel and travel bookings, and other local services like entertainment, beauty, and transportation.
   • Food delivery is the core segment, with Meituan Dianping being the world's largest on-demand food delivery service provider by transaction volume.
   • In 2017, the company had approximately 14.7 million average daily food delivery transactions and a gross transaction volume of RMB171bn in food delivery alone.
   • The company also maintains a No.1 market share in the in-store dining market in China.

2. Services to Merchants

   • Provides marketing and sales support, on-demand delivery infrastructure, cloud-based ERP systems, and payment solutions.
   • Merchants can access tools for digital menus, table booking, order management, and customer relationship management.
   • The company has developed a real-time intelligent dispatch system to optimize delivery routes and improve service efficiency.
   • It also offers pre-sale and post-sale mechanisms to ensure food safety and quality.

3. New Retail Business

   • Combines online and offline operations to deliver goods and services directly to consumers.
   • Services include grocery delivery, flowers, and other non-food retail items.
   • The company launched its first offline grocery store, Ella Supermarket, in Beijing.
   • It also operates a peer-to-peer courier platform, Meituan Paotui, for local delivery of goods.

Financial Highlights

• Revenue Growth:

  • RMB4bn in 2015, RMB13bn in 2016, and RMB33.9bn in 2017, representing a YoY increase of 161.2% in 2017.
  • Food delivery services accounted for the largest share of revenue, generating RMB21bn in 2017, or 62% of total revenue.
  • In-store, hotel & travel services generated RMB10.6bn in 2017, representing 32% of total revenue.
  • New initiatives and other services contributed RMB2bn in 2017, up 206% YoY.

• Gross Transaction Volume (GTV):

  • In 2017, the total annual GTV reached RMB357bn.
  • Food delivery GTV was RMB171bn, in-store and hotel GTV was RMB158bn.

• Net Loss:

  • The company reported a net loss of RMB19bn in 2017, up from RMB5.8bn in 2016.
  • Gross margin decreased to 36% in 2017, primarily due to increased incentives and advertising costs.

Market Landscape and Growth Prospects

• The consumer services e-commerce industry in China is expected to grow at a CAGR of 19.8% from 2017 to 2023, reaching RMB8,011bn.
• Food and dining is the fastest-growing segment, with on-demand delivery expected to grow at 31.0% CAGR and online non-restaurant food retail at 22.1% CAGR.
• Meituan Dianping's market share in on-demand delivery rose from 31.7% in 2015 to 59.1% in Q1 2018.
• In the hotel booking market, Meituan Dianping holds a 19.6% market share in 2017, with a growing presence in online bookings.

Strategic Partnerships and User Engagement

• The company has a strategic alliance with Tencent, allowing it to leverage Weixin and QQ for user acquisition and engagement.
• Users can access services through multiple channels, including third-party apps and the company's own platforms.
• Meituan Dianping offers a variety of incentives such as coupons and discounts to attract users and delivery riders.
• It has developed its own payment system, Meituan Payment, alongside third-party options like Weixin Pay and Union Pay.

Conclusion

Meituan Dianping is a key player in China's O2O and local lifestyle services market, with a strong focus on food delivery and in-store services. Its diverse range of offerings, strategic partnerships, and innovative use of technology have contributed to its rapid growth. Despite reporting a net loss in 2017, the company continues to expand its market share and invest in new retail initiatives, positioning itself for long-term success in the evolving digital economy.