First Shanghai stated that Meituan delivery and local life are expected to continue to release operating profits in the future.
Zhixin Finance APP learned that First Shanghai released a research report saying it maintains a "buy" rating for Meituan-W (03690) with a target price of 220 Hong Kong dollars. The company's 24Q3 performance far exceeded expectations, Meituan's core local business profitability continues to improve, once again verifying the high barriers to entry for Meituan delivery and the long-term growth potential of local life. Meituan's business remains stable, the competitive landscape continues to improve, corporate governance levels are continuously increasing, and measures to focus on shareholder returns by the management team make the growth potential of Meituan's business sustainable. Meituan delivery and local life are expected to continue to release operating profits in the future.
First Shanghai's main points are as follows:
24Q3 performance significantly exceeded market expectations:
24Q3 revenue reached 93.6 billion yuan (YoY +22.4%), market expectation 91.7 billion yuan. Operating profit was 13.7 billion yuan, operating profit margin 14.6%, adjusted net income 12.8 billion, higher than the institutional consensus of 11.7 billion yuan, adjusted net profit margin 13.7%, mainly due to the continuous improvement in the core local business profitability, optimization of operating efficiency, and significant reduction in losses in new businesses. The company continues to optimize costs, strive to improve operating cost efficiency, gross margin increased by 3.3% year-on-year to 38.6%, operating profit margin increased by 10.2% to 14.6%. In 24Q2, the company achieved operating cash inflow of 15.2 billion yuan in the third quarter (YoY +36.0%), 40.3 billion in the first three quarters (YoY +33.7%), holding cash and cash equivalents of 42.5 billion yuan and 91.7 billion respectively.
Continuous improvement in core local business profitability:
24Q3 core local business revenue 69.4 billion yuan (YoY +20.2%, QoQ +14.3%), operating profit 14.6 billion (YoY +44.4%), operating profit margin increased by 4% to 21.0% year-on-year. 24Q3 instant delivery transactions (dining delivery + flash purchase orders) were 7.078 billion (YoY +14.5%), with a daily average of 78.64 million orders. Among them, the daily average number of flash purchase orders exceeded 10 million, and the number of users and transaction frequency both achieved double-digit year-on-year growth. The flash purchase business has a high ceiling, ideally reaching a penetration level of 10% of the e-commerce large cap market, at least in a 5 trillion GMV market size; in-store travel orders showed strong growth, with a growth rate of over 50% year-on-year, annual trading users and annual active merchants both reaching historical highs; the long-term growth prospects of Meituan's in-store travel business remain solid. In addition, the company upgraded its "premium membership" to cross-sell hotel nights to high-quality users, with plans to expand nationwide in the future.