CMB International Securities | Equity Research | Company Update Summary
Core Content
This report provides an equity research update on Meituan (3690 HK), focusing on its performance in 3Q21E, long-term growth outlook, and financial projections. The report also includes key financial data, shareholding structure, and investment ratings.
Main Points
3Q21E Performance Overview
- Revenue Forecast: +37% YoY, in line with consensus.
- Adj. Net Loss: RMB5.6bn, slightly higher than the consensus of RMB5.0bn.
- Segment Performance:
- Food Delivery: Revenue growth of +26% YoY, OPM at 3%, due to higher subsidies and impact from the pandemic and natural disasters.
- In-store, Hotel & Travel: Revenue growth of +31% YoY, OPM at 40%, with one-off impacts from the pandemic and floods.
- New Initiatives & Others: Revenue growth of +70% YoY, indicating strong performance in emerging areas.
Long-Term Outlook
- The company is expected to maintain long-term organic growth with high barriers to entry.
- Short-term headwinds such as regulatory pressure and epidemic impact are considered manageable.
- Target Price (TP) is maintained at HK$383, with a +35.3% upside from the current price of HK$283.
Financial Projections
| Financial Metric |
FY19A |
FY20A |
FY21E |
FY22E |
FY23E |
| Revenue (RMB mn) |
97,529 |
114,795 |
180,891 |
253,279 |
324,840 |
| YoY Growth (%) |
50 |
18 |
58 |
40 |
28 |
| Net Income (RMB mn) |
4,657 |
3,121 |
-15,465 |
-1,105 |
17,078 |
| EPS (RMB) |
0.79 |
0.52 |
-2.50 |
-0.17 |
2.61 |
| P/E (x) |
295 |
446 |
NA |
NA |
89 |
| P/S (x) |
14.6 |
12.4 |
7.9 |
5.6 |
4.4 |
Key Financial Ratios
| Ratio |
FY19A |
FY20A |
FY21E |
FY22E |
FY23E |
| Operating Margin |
-11.4% |
-2.7% |
-11.4% |
-2.7% |
4.0% |
| Adj. Net Margin |
-8.5% |
-0.4% |
-8.5% |
-0.4% |
5.3% |
| ROE (%) |
3.7 |
5.0 |
-29.3 |
-9.8 |
14.6 |
| ROA (%) |
3.7 |
2.2 |
-10.4 |
-0.8 |
11.1 |
Shareholding Structure
| Holder |
Percentage |
| Tencent |
19.5% |
| Sequoia Capital |
6.5% |
| Baillie Gifford |
5.0% |
Stock Performance
| Period |
Absolute (%) |
Relative (%) |
| 1-Month |
-1.5 |
+2.0 |
| 3-Months |
-15.2 |
-2.7 |
| 6-Months |
-33.8 |
-24.5 |
Analyst Recommendation
- Rating: BUY
- Reasoning: Despite short-term challenges, the company's long-term growth potential is strong, and the TP remains at HK$383. The report suggests buying during dips due to regulatory overhang.
Earnings Comparison
| Metric |
CMBIS Estimate |
Consensus |
Diff (%) |
| Revenue (FY21E) |
180,891 |
182,757 |
-1.0% |
| Gross Profit (FY21E) |
46,138 |
44,974 |
+2.6% |
| Operating Profit |
-20,559 |
-20,597 |
NA |
| Adj. Net Profit |
-15,465 |
-15,489 |
NA |
| EPS (FY21E) |
-2.50 |
-2.70 |
NA |
Investment Highlights
- The new initiatives segment showed the highest growth in 3Q21E with a +70% YoY increase.
- The in-store, hotel, and travel segment is expected to see a +30% YoY growth.
- Daily orders for tier 1 players reached 30 million in September, indicating sequential growth.
- Regulatory and epidemic impacts are considered manageable, with seasonality expected to improve in 4Q21E.
Risk and Disclaimer
- The report is for informational purposes only and not investment advice.
- There may be material differences between actual results and forecasts.
- CMBIS does not guarantee accuracy or completeness of the data.
- Conflicts of interest may exist due to investment banking relationships.
Analyst Certification
- The research analyst certifies that all views expressed reflect their personal opinions.
- No compensation was linked to the views in the report.
- The analyst has not traded in the stock covered within 30 days before the report's issue date.
Conclusion
Meituan is expected to overcome short-term challenges and maintain strong long-term growth. The report recommends a BUY rating, with a target price of HK$383, suggesting investors should consider buying during dips due to market volatility and regulatory uncertainty.
