Incident: Meituan achieved revenue of 48.8 billion yuan in 2021/Q3, an increase of 38% over the previous year; adjusted EBITDA was 4.0.6 billion yuan, and adjusted net profit was 5.53 billion yuan. The company's revenue and profit exceeded Bloomberg's unanimous expectations. Despite repeated outbreaks of the epidemic and weak macro consumption, the company still showed great resilience.
Takeaway business: Revenue side - Although the convenience of delivery has been challenged by repeated epidemics, and the macroeconomic downturn affected demand in the catering sector, the company's Q3 revenue still reached 26.5 billion yuan, up 28% year on year, GMV was 1971 billion yuan, up 29.5% year on year, and the overall promotion rate was 13.4%, down 0.2 pct from the same period in 2020; Q3 takeaway business operating profit was 880 million yuan, and profit margin fell to 3.3% (2020Q3 was 3.7%). Revenue growth was mainly driven by the number of quarterly trading users and transaction frequency This was due to record highs during the same period, which led to an increase in transaction amounts. The decline in profits was mainly due to increased incentives for trading users and increased marketing activities.
Operations — The average number of transactional users reached 668 million in Q3 2021/3, an increase of 40.1% over the previous year; the order volume in Q3 was 4.01 billion orders, an increase of 24.9% over the previous year, and the customer unit price was 49.1 yuan, an increase of 3.7% over the previous year. The overall quality of restaurants on the company's platform further improved, and the number of high-quality restaurants also increased dramatically.
Business structure - The share of marketing business rose to 12.0% (11.6% in the same period in 2020), and the share of commission revenue fell to 87.7% (88.2% in the same period in 2020), mainly due to the increase in the number of active merchants due to the online marketing services provided by the company.
In-store wine tourism business: 2021Q3, in-store, hotel and travel business revenue increased 33.1% year-on-year to 8.62 billion yuan. The operating profit of the retail, hotel and travel business increased from $2.8 billion in Q3 2020 to $3.8 billion in Q3 2021. The increase in revenue was mainly due to the increase in merchant penetration rate and low-tier market coverage, as well as the increase in transaction frequency and user stickiness; while the operating profit margin increased from 43% to 43.9%. The improvement in operating margins came mainly from the contribution of online marketing service revenue.
The company's domestic hotel night volume reached 120 million in Q3 2021, up from 2019 and the same period in 2020, mainly because the company strengthened the short trip scenario while combining structured advantages in local accommodations and the development of marketing activities to better meet consumer needs.
New business: 2021Q3's revenue was 13.72 billion yuan, an increase of 66.7% over the previous year, operating losses of 9.9 billion yuan, a loss rate of 79.5%, the operating loss rate of 2020Q3 was 24.7%, and the operating loss rate of 2021Q2 was 76.8%. The increase in loss rate was mainly due to strong investment in Meituan Preferred, online car-hailing and technology.
Profit forecasting and investment ratings: Due to the recurrence of the pandemic and weak consumption affecting the company's business, we lowered the 2021-2023 revenue level from 183,506/245,255/318,001 to 179,292/248,559/350,563 billion yuan, an increase of 56.2%/38.6%/41% over the previous year; as the company has strong user stickiness in the takeout and delivery sector, cost investment is expected to decline, so the 2021-2023 EPS will be adjusted from -2.9/-0.8/0.6 As high as -2.8/-0.4/1.1, corresponding to 2023 PE is 217 times. Although Meituan Preferred has an impact on the company's profitability in the short term, it helps the company sink deeper into regions that were previously difficult to penetrate, such as townships, and enhance its competitive advantage while improving customer acquisition efficiency. We maintain the company's “buy” rating. (The exchange rate is based on HKD/RMB = 0.8197 on 2021/11/29)
Risk warning: rising costs for takeaway riders, risk of market supervision, risk of new business losses Note: No special instructions. The currency unit for the relevant data in this article is RMB.