Jinwu Financial News | According to the First Shanghai Development Research Report, Meituan (03690)'s 24Q1 revenue and profit both exceeded market expectations, mainly due to a 28% increase in takeout orders that exceeded expectations and a sharp reduction in losses in community group purchases. According to the bank, profits from core local commercial operations continued to improve in 24Q1; losses from new businesses continued to narrow, focusing on high-quality development.
The bank believes that Meituan's dominant takeaway business will maintain 70% of the market share, be in an absolute leader position, and increase the average UE profit per order through subsequent refined operations, reduced subsidies, capacity restructuring, and increased commission rates. The local lifestyle business is expected to maintain its leading position in the local lifestyle industry based on Meituan's ecological advantages and concessions. Based on the above views, the bank believes that Meituan's future profit contribution will be further unleashed, and the ROI of the new business will gradually increase. Combined with the current general valuation of Hong Kong stock Internet companies in the 10-15 times range, it has given Meituan's take-out and on-site wine tourism businesses 23 times and 15 times PE valuations of the 24-year tax deductible profits, respectively, to arrive at a target price of HK$135 (originally HK$130) to maintain the purchase rating.