Incident: On December 27, according to Meituan's official website, Meituan will launch the Meituan Mini Program on the Kuaishou Open Platform to provide Meituan merchants with product display, online transactions and after-sales services such as packages, vouchers, and reservations. Kuaishou users will be able to go directly through the Meituan Mini Program. At present, the Meituan Mini Program has completed the pilot launch of the food category. In the future, various lifestyle service categories such as hotels, bed and breakfasts, scenic spots, leisure, beauty salons, and script sales will be launched one after another.
We have always recognized Meituan's central position and growth ability in the takeaway and in-store business. We believe that as a leading local lifestyle platform: 1) The leading position in the takeaway business is stable, and its market share continues to rise. As an important traffic entry point for consumers and merchants on local lifestyle platforms, the demand penetration rate still has a lot of room for improvement, and there is great potential for monetization; 2) In-store business and takeout business collaboration, compared to content-oriented platforms such as Douyin and Kuaishou, its core advantage lies in the availability and conversion rate of vertical traffic. Previously, Douyin and Kuaishou were involved in the local lifestyle business separately, but there was not a high level of GMV completion throughout the year, which is why.
Achieving connectivity with Kuaishou confirms the central position of the main business, and is a strong team to embrace growth. We believe that Meituan and Kuaishou announced a strong alliance: for Yu Meituan, on the one hand, it confirms Meituan's central position in the field of in-store and local life, and on the other hand, it is beneficial to increase traffic sources; for Kuaishou, it is beneficial to strengthen cooperation on the local lifestyle side, achieve a closed loop of transactions, and participate in revenue sharing. The two are strong and united to embrace growth, which is mutually beneficial and win-win.
Investment advice: The company is essentially a local lifestyle service platform that aggregates the needs of consumers and merchants in all aspects. Under the huge market space, the main business has good growth and high certainty. The pattern of the new business as a C-side drainage and frequency increase entry point is becoming clear and is expected to accelerate. This cooperation with Kuaishou is conducive to strong alliances for mutual benefit and win-win situation.
Adjusting the profit forecast to 2021-2023, the company's operating income was 188.82 billion yuan/253.18 billion yuan/315.0.6 billion yuan respectively, net profit was -17.143 billion yuan/-8.731 billion yuan/10.961 billion yuan respectively. EPS was -2.80 yuan/share, -1.42 yuan/share, 1.79 yuan/share, corresponding to the segment valuation given in 2023, corresponding to the target price of 290.6 yuan/share, maintaining the “buy” rating and maintaining recommendations.
Risk warning: industry competition intensifies; policy risks; changes in consumer habits seriously fall short of expectations.