Meituan released its second-quarter results on Aug. 26, showing double-digit revenue growth and a sharp narrowing of the net loss by 66.7%, exceeding market expectations. It is worth mentioning that the revenue of the new business segment, including Meituan's optimal selection and Meituan's real-time retail business, has greatly increased by more than 40%, becoming Meituan's new growth driver.

By the end of the second quarter, Meituan had surpassed Tencent to become the largest public offering of Hong Kong stocks. Ruiyuan Fund, Eastern Securities Asset Management, Jingshun Great Wall Fund, Huitianfu Fund and other well-known public offerings have significantly increased their holdings of Meituan. Hu Xinwei and Zhao Feng are firmly optimistic about Meituan in the quarterly report. Meituan accounted for an increase in the heavy positions of star managers such as Wang Zonghe, Chen Hao and Xiao Nan. Meituan is held by 281 public offering funds, with a market capitalization of about 32.9 billion yuan, according to CICC data. Both the number of public offering funds and the market capitalization of positions have nearly doubled from the first quarter.

In addition, including Meituan, many Internet companies generally reported better-than-expected results, which restored market confidence in investment in Hong Kong-listed Internet companies. Qiu Dongrong, a "top" fund manager, believes that the monetization and liquidity of Internet companies, which are most concerned about in Hong Kong stocks, will continue to improve, and the most sensitive stage of policy has passed; the current valuation level is low, which will help to realize the value of the investment.

Meituan's second quarter performance exceeded expectations.

Meituan released its financial results for the second quarter of 2022. Meituan's second-quarter revenue was 50.94 billion yuan, up 16.4% from the same period last year, exceeding market expectations of 48.59 billion yuan. Meituan's net loss during the period was 1.12 billion yuan, 66.7% lower than the same period last year and better than the market's expected loss of 3.24 billion yuan. The adjusted net profit was 2.06 billion yuan, better than the market expected loss of 2.17 billion yuan.

Since the beginning of this quarter, Meituan has made a new division of the business sector in his financial report, bringing the original catering takeout business, inbound wine travel business and flash buying business into the core local business segment. Meituan optimal selection, Meituan shopping, catering supply chain (fast donkey), online car-hailing, bike sharing and other businesses into the new business segment.

According to the financial report, in the second quarter, Meituan's core local business division achieved an income of 36.779 billion yuan, an increase of 9.2% over the same period last year, an operating profit of 8.261 billion yuan, a year-on-year increase of 39.7%, and an increase of 4.9 percentage points to 22.5% over the same period last year. The revenue of the new business segment was 14.159 billion yuan, up 40.7% from the same period last year, and the operating loss was 6.79 billion yuan, narrowing both year-on-year and month-on-month comparison. As a representative of the new business, Meituan's quarterly trading users and orders reached a record high in the second quarter.

Meituan said that driven by related business, the number of trading users on Meituan platform reached 685 million in the second quarter of this year, an increase of 8.9 per cent over the same period last year. The number of instant delivery orders (including catering takeout and flash purchase transactions) increased by 7.6 per cent to 4.1 billion, and the per capita transaction frequency increased by 16.2 per cent to 38.1 compared with the same period last year. The continued growth of real-time retail orders has provided new momentum for the recovery and development of local brick-and-mortar businesses. In the second quarter, the number of annual active merchants on Meituan platform increased to 9.2 million, a record high.

According to the financial report, in order to support the high-quality development of cooperative merchants nationwide, Meituan further increased the exploration and construction of retail infrastructure, including cold chain logistics and warehousing, and continued to increase funding for related scientific and technological research and development. In the second quarter, Meituan's R & D expenditure reached 5.2 billion yuan, an increase of 33% over the same period last year.

Based on the sound business strategy, Meituan's sales cost-to-income ratio and marketing expense rate have both declined compared with the same period last year and month-on-month. Driven by this, Meituan's second-quarter operating loss of 493 million yuan, year-on-year, month-on-month are significantly narrowed.

According to the Zheshang Securities Research report, although Meituan's business was affected by the epidemic in the second quarter, there were still bright spots such as flash purchase growth, takeout recovery, and optimal loss reduction than expected. The team believes that "with the normalization of nucleic acid in big cities and more scientific epidemic management measures, the company's performance will return to growth quarter by quarter." "

In terms of share price, affected by rumors that Tencent might sell all Meituan shares, Meituan fell more than 10% on Aug. 16, the lowest level since June. After being refuted by Tencent, the stock price stabilized somewhat. As of August 26, Meituan closed at HK $181.9 per share, with a total market capitalization of HK $1.13 trillion.

Chenggong has the largest number of Hong Kong stocks.

It is worth noting that in the second quarter, public offering funds moved southward to add Hong Kong stocks obviously. Meituan surpassed Tencent to become the largest public offering position in Hong Kong stocks.

According to CICC data, according to the summary data of positions disclosed in the fund's second quarterly report, the market value of Hong Kong stocks held by 2443 mainland public equity funds that can invest in Hong Kong stocks is 404.2 billion yuan, an increase of 27% from the first quarter, reversing the downward trend since the third quarter of 2021 and close to the level of the third quarter of 2021. In terms of proportion, Hong Kong stocks accounted for 12.1% of the fund's total assets and 17.1% of the total stock market value in the second quarter, an increase of 1.9 percentage points from 15.2% in the first quarter of 2022.

In terms of the number of allocation, in the second quarter, public funds held a total of 658 Hong Kong stocks, an increase of 101 over the previous period, an increase of nearly 20%. Among them, Meituan and Tencent were held by 281,185 public funds respectively, while Meituan's number of funds was almost double that of the first quarter.

From the point of view of the allocation scale, in the second quarter, the heavy holdings of Meituan and Tencent by public offering funds exceeded 20 billion yuan. Of these, Meituan was held 32.9 billion yuan, nearly double the market value of the previous period, and Tencent's total shareholding market value was 20.747 billion yuan, slightly less than the 20.858 billion yuan in the first quarter.

Overall, Hong Kong technology stocks are still the favorite sector for public offering funds to buy southward, while Meituan has become the focus of the "Nuggets". Both the number of public offering funds and the market value of their positions have nearly doubled from the first quarter. Ruiyuan Fund, Eastern Securities Asset Management, Jingshun Great Wall Fund, Huitianfu Fund and other well-known public offerings have significantly increased their holdings of Meituan. Hu Xinwei and Zhao Feng are firmly optimistic about Meituan in the quarterly report. Meituan accounted for an increase in the heavy positions of star fund managers such as Wang Zonghe, Chen Hao and Xiao Nan.

Hong Kong stock Internet companies welcome the layout opportunity?

Including Meituan, many Internet companies reported better-than-expected results, which restored market confidence in investment in Hong Kong-listed Internet companies.

Among them, the share price of Tencent has rebounded by more than 7% since the announcement of its results. According to the financial report, Tencent's revenue in the second quarter was 134 billion yuan, down 3 per cent from the same period last year and still better than expected. The net profit was 18.6 billion yuan, down 56 per cent from 42.587 billion yuan in the same period last year. The share price of JD.com Group rose 11% after the results were released on August 24th. Data show that JD.com 's income in the second quarter was 267.6 billion yuan, an increase of 5.4 percent over the same period last year, exceeding market expectations. The net profit of returning home was 4.4 billion yuan, compared with 800 million yuan in the same period last year.

Xu Meng, a Huaxia fund manager, said recently that stricter supervision in the early stage is the main factor that suppresses the Hong Kong stock science and technology sector. The current policy layer further affirms the positive role of the digital economy and promotes a friendly policy environment for Hong Kong stock science and technology enterprises. The investment success rate of Hong Kong stock science and technology enterprises continues to rise. On the whole, the policy risk of the current Hong Kong stock market is basically clear, with the time advantage of the left layout.

Qiu Dongrong said in the 2022 report that he will still focus on the value stocks, some Internet stocks and pharmaceutical technology growth stocks represented by resources and energy in Hong Kong stocks. Among them, there are three reasons for being optimistic about the Internet companies that are most concerned about Hong Kong stocks:

• First, these companies are involved in all aspects of clothing, food, housing and transportation, and they are extremely sticky. the core demand they face is growing, and their monetization ability and cash realization ability will continue to improve.

• Second, the most sensitive stage of policy has passed, these companies have transitioned from policy mitigation to returning to their own values and focusing on core business areas, so that solid business barriers can be competitive enough to gain the future.

• Third, the current valuation level is low, the slow expansion of these companies, cuts in non-core business capital expenditure, the company's earnings and cash flow level is expected to increase, will contribute to the realization of investment value.