June 6,$MEITUAN-W (03690.HK)$The first quarter results will be finalized.
Regarding the upcoming financial report for the first quarter of 2024, the market generally predicts that Meituan achieved revenue of 69.590 billion yuan in the first quarter, an increase of 18.72% over the previous year; profit per share was 0.62 yuan.
Looking back at Meituan's trend this year, from the historical low of HK$61.1 on February 5 to the recent high of HK$129.2, Meituan's increase reached 111%. It only took more than 3 months. Even after the correction in recent days, the increase was over 70%.
In addition to the overall recovery of the Hong Kong stock market, the market's positive expectations for Meituan's performance are a key factor driving the sharp rise in its stock price in the short term. Therefore, investors are looking forward to the upcoming quarterly report, hoping to see a significant improvement in performance and an upward inflection point.
According to a research report published by Bank of America, it is estimated that with market competition stabilizing, Meituan's performance in the first quarter was generally in line with expectations, and core business profits will increase throughout the quarter and the whole year. The bank currently estimates that the stable performance of the Lunar New Year market this year will drive Meituan's first quarter delivery service orders to increase 20% year-on-year. Bank of America expects
The development of Meituan's meal preparation business will help drive the increase in order volume. Currently, it is still expected that Meituan's operating profit per order will remain at the level of 1.18 yuan throughout the year.
As for the retail, hotel and travel business, the bank believes that competition in the industry has been rationalized, and predicts that the operating profit margin of this business will gradually improve from the second quarter of this year; losses from the new business are expected to be within the scope of control.
Bank of America predicts that Meituan's revenue for the first quarter will increase 20% year-on-year to $70.5 billion. Profit from core business operations is expected to reach 8.6 billion yuan, and the target price will be raised from HK$132 to HK$135, reaffirming its “buy” rating.
Citigroup released a report stating that it believes Meituan's first-quarter results were stable and in line with market expectations. The main highlights include:
Management comments on the outlook for the next quarter and the full year of the year, customer demand for core local services, unit economics (Unit Economics) and profit margin trends, market competition, extreme weather effects, loss reduction progress in new businesses, and investment budgets for overseas business and new technology.
The bank raised its target price from 128 yuan to 134 yuan, reflecting a multiplier increase in the food delivery industry's target. In response to its double-digit revenue growth, continued improvement in profits and profit margins, and potential catalysts brought about by overseas expansion, Meituan Preferred's losses narrowed faster than expected, maintaining a “buy” rating.
Furthermore, it is worth noting that Meituan Takeaway's overseas expansion is progressing brilliantly. Since officially entering the Hong Kong market in May 2023, Meituan's Hong Kong takeout platform KeeTA has leapt into the market leader. According to the number of takeout orders in March 2024 according to the third party platform Measurable AI, KeeTA accounted for about 44% of total takeout orders in Hong Kong, surpassing rival FoodPanda by 35% to become number one in Hong Kong.
Measurable AI data also indicates that as a new entrant in the Hong Kong takeaway market, KeeTA has played a positive role in stimulating the healthy growth of the Hong Kong takeaway market. According to the data, compared to Q1 of 2023, demand for online grocery takeout in the Hong Kong market increased significantly in Q1 of 2024. Order volume increased by more than 40% year on year, and total commodity transaction value (GMV) increased by about 22% year on year.
At the same time, Meituan also previously planned to enter the Middle East takeout market. The market is generally optimistic about the company's new growth curve in the overseas takeout business.
Overall, Tianfeng Securities believes that Meituan's core competitiveness lies in its strong merchant base and real user reviews accumulated over decades. Looking at this stage, barriers to the takeout business are stable, and the external competition pattern is gradually becoming clear. It is expected that the profitability of Meituan's core local businesses will continue to increase in the future.
HSBC Research also said that among the new economy stocks, Meituan favors Meituan. Meituan continues to have a leading position in the takeaway business. Coupled with the potential easing of in-store business competition, the Q1 financial report may become a new catalyst for stock prices.
Click to schedule an appointment: Meituan 2024Q1 results live broadcast (simultaneous interpretation)
Editor/Somer