JPMorgan released a research report stating that they believe Meituan is one of China's highest quality consumer and internet companies, maintaining a "shareholding" rating for Meituan-W (03690) with the target price raised to 200 Hong Kong dollars. The company's profitability remains strong, with forecasted adjusted earnings per share growth of 33% next year, 9% higher than market forecasts, and one of the fastest-growing companies within their coverage.
The report states that Meituan is one of the best-performing stocks among China's internet stocks this year, and still believes its stock price has room to rise in the next 6 to 12 months. This is mainly due to the increasing level of monetization and the improving impact of revenue recovery in the on-site and hotel business. The bank pointed out that due to warmer weather in the fourth quarter, coupled with the relatively high base of Meituan's flash sales, it is expected that the year-on-year growth of Meituan's delivery service revenue in the fourth quarter will be slightly lower than the third quarter, but the profitability of the delivery service will still improve significantly, supporting overall profit growth of the core local business.
