20231129-招银国际-美团-W-03690.HK-Proactive_competitive_strategy_may_weigh_on_near-term_margin_but_benefit_LT_growth_6页_1mb

Meituan (3690 HK) Company Update
Date: 2023-11-29
Source: CMB International Global Markets

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Key Financial Results Q3 2023

• Revenue: HKD 76.5 billion, +22% YoY, better than Citi & Bloomberg consensus.
• Adjusted Net Profit: HKD 5.7 billion, exceding Citi forecast by 3% and Bloomberg consensus by 8%.

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Business Segment Analysis

Core Local Commerce (CLC)

• Revenue Growth: 25% YoY, HKD 57.7 billion in Q3.
• Adjusted OP Margin: 14.7% (Q4 2022: 16.6%), slightly below consensus, due to new investments in tourism tickets and competition strategies.
• Key Strategy: Transition to first-party model in lower-tier cities, aimed at better control but may weigh on short-term margin.

New Initiatives (e.g., Meituan Select)

• Revenue Growth: 15% YoY, HKD 18.8 billion in Q3.
• Loss: HKD 5.1 billion, narrowing trend expected in 2024.
• Strategy: Continued investment for long-term growth, despite macroeconomic pressures.

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Valuation & Price Target

• New Target Price: HKD 161.5 (down 9% on previous estimate), implying ~56.8% upside from current price.
• Recommendation: BUY – potential 15%+ return over 12 months.

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Key Risks & Opportunities

Risks

• Competition: Ongoing fierce competition, particularly with Douyin, may extend to long-term.
• Margin Pressure: Short-term margin dilution from aggressive growth strategies and user subsidies.
• Macroeconomic Factors: Weak demand may impact food delivery business unit economics.

Opportunities

• CLC Growth: Sustainable revenue expansion supported by stable user base and strategy execution.
• New Business: Long-term potential from Meituan Select, despite short-term losses.

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Rating

CMBIGM Rating: BUY
Analyst Certification: Views reflect personal analysis; no compensation tied to report content.

End of Summary