Kingwus Financial News | Bocom Intl issued a research report pointing out that Meituan (03690) second-quarter revenue increased by 21% year-on-year, higher than the bank's/consensus expectation of 19%/18% growth. Among them, the core business/new business increased by 19%/29%. The year-on-year operating profit margin of the core business adjusted increased by 3.3 percentage points, better than the bank's expectation. The loss of new business narrowed significantly compared to the previous period.
The bank stated that the company's various business growth in the second half of the year remains steady, meeting diverse user needs with diversified products. It is expected that the company's revenue/adjusted operating profit growth in 2024 will be better than the previous expectations by about 1.2%/8%. It is expected that the core business revenue will increase by 20% in 2024, mainly driven by the improvement in advertising monetization of delivery/takeout business, and the sustained 35% growth in GMV of offline business, driving the commission and merchant advertising. New business revenue is expected to increase by 23%, driven by businesses such as Xiao Xiang Supermarket/Express Donkey and the improved pricing of selected SKUs. It is expected that the adjusted operating profit in 2024 will exceed 40 billion yuan (originally 37.4 billion yuan), with core business profits reaching 48.5 billion yuan, a 25% year-on-year increase, mainly driven by the monetization and optimization of delivery subsidies, further increase in UE, and the expected loss of new business is 8 billion yuan (originally 9 billion yuan).
The bank raised the net income for 2024/25 by 7.5%/2%, and expects the net income growth for 2024/2025 to be 70%/20%, indicating a steady business and continued profit release. The bank adjusted the valuation method, corresponding to a 20% growth in net income in 2025, 0.8 times PEG, raised the target price to 136 Hong Kong dollars (originally 129 Hong Kong dollars), and maintained a buy rating.
