This report is read as follows:

It is expected that unmanned distribution will be applied on a large scale in 2025, and the average distribution cost of Meituan takeout is expected to fall sharply beyond market expectations.

Summary:

Investment advice: with the continuous improvement of the unmanned distribution system, we expect large-scale application in the next 1-2 years. Meituan-W will benefit greatly. Combined with the existing transport capacity, the per capita distribution cost is expected to fall sharply beyond market expectations. We estimate that the company's income from 2021 to 2023 will be 1786 yuan, 2484 yuan and 345.1 billion yuan respectively, and the return net profit will be-250,159 and 15.1 billion yuan respectively. Maintain the Meituan-W target price of HK $383.73 and maintain the overweight rating.

Unmanned distribution to solve the last kilometer distribution pain point. Under the aging of ① population, the labor shortage in the distribution industry brings cost growth. Under the special circumstances of ② (weather, epidemic, etc.), the transport capacity is tight. Traffic accidents of distribution personnel at the end of ③ occur frequently. Under the ideal condition of ④, the average distribution cost of unmanned distribution vehicle is 3.1yuan / unit, and the weighted distribution cost is 4.1yuan / unit. Assuming that the mode of unmanned distribution plus distributors accounts for 30-50% of Meituan's total takeout volume by 2025, the average distribution cost can be reduced from 7 yuan to 5.5-6.1 yuan.

Policy, technology and cost are expected to accelerate breakthroughs. In terms of ① policy, national and local units hold a positive attitude towards unmanned distribution, and some areas have introduced preferential subsidy policies. Because ② is related to road traffic safety and the fault tolerance rate of autopilot is very low, it has systematically dealt with the details and difficulties, but it still faces all kinds of problems and is being improved. From the perspective of hardware performance, domestic parts have been able to meet the basic needs of unmanned distribution vehicles. The cost of ③ unmanned delivery vehicle has dropped from 30-500000 yuan to 10-200000 yuan, and it is expected that the cost of a large-scale post-natal bike will be reduced to 5-100000 yuan.

Companies at home and abroad accelerate the layout, and China is significantly in the lead. The field of ① real-time distribution is the most likely scenario to realize the large-scale application of unmanned distribution vehicles. It is expected that there will be a significant scissors gap in 2023, and the industry will enter a period of rapid development. The development path of ② Chinese industrial robot can provide reference for the development of unmanned distribution. The three giants of ③ Meituan, JD.com and BABA have invested tens of billions of dollars to cultivate the industry for 5-6 years. The overseas unmanned distribution industry is mainly based on the American unmanned distribution company Nuro and the unmanned distribution vehicle startup company Starship Technologies.

Risk hints: macroeconomic downside risks; unmanned distribution policies are lower than expected; weak economies of scale lead to a lower than expected decline in the cost of unmanned distribution vehicles.