Incident: On July 11, according to the official account of Meituan Takeout Partner City, Meituan's marketing development department updated investment information, and Meituan plans to recruit elevator video media advertising franchisees. On the evening of the 11th, according to Interactive Easy, everyone said, “We are working with Meituan to promote elevator video media operation cooperation in low-tier cities, hoping to use the advantages of both parties to provide more comprehensive and high-quality services to small and medium-sized enterprises in the sinking market.”
Why did Meituan set up ladder media? Based on Meituan's business model and resource endowments, we infer that Meituan's strategic considerations may be: (1) For local Meituan businesses, it is expected that through advertising in the surrounding area, it is expected to accurately drive traffic to their own stores, including takeout and in-store businesses. (2) For Meituan, it has rich local merchant resources to facilitate the transformation of advertising from online to offline.
Why did Meituan and Fanzhong choose to cooperate? What impact does it have on the crowd? We believe that the core starting point of cooperation between the two sides is the “sinking market” and “small and medium-sized enterprises”. Joining forces with Meituan will help it accelerate the penetration of small and medium-sized customers in low-tier cities, and the share and revenue contribution of low-tier cities is expected to increase.
(1) The “sinking market” aspect: According to the official account of Meituan's takeout partner cities, Meituan will choose the sinking city as an entry point. Currently, the main locations of crowds are located in high-tier cities, and there is still room for improvement in the penetration rate of low-tier cities. According to the Fortune 23 annual report, as of 24Q1, Fenzhou's own elevator TV media had 1.051 million channels (0.897 million in China, 0.154 million overseas). Domestically, 0.262 million in first-tier cities, 0.563 million in second-tier cities, 0.072 million in third-tier cities and 0.072 million in third-tier and lower-tier cities, respectively, accounted for 29%/63%/8% of the points.
(2) On the “SME” side: The audience easily points to strengthen SME services in interaction. What is reflected behind this is the advertiser structure where KA customers contribute more than small and medium-sized customers. According to the Fenghuang Investor Relations Activity Record List, the customer retention rate of over 90% over the past few years has invested in the 100 million yuan level, while the customer retention rate of 10-50 million yuan is about 70% or more. There are many small to medium businesses in Meituan's local businesses. Cooperation between the two parties may be better able to transform Meituan's business resources from Meituan's online to mass offline marketing.
Profit forecast and investment rating: The company's 24-26 revenue is estimated to be 13.38, 14.53, 15.53 billion yuan, and net profit to mother of 5.26, 5.86, and 6.33 billion yuan. The corresponding PE is 15.8x, 14.2x, and 13.1x, respectively. Based on the company's stable position in the industry and deep commercial barriers, it maintains a “recommended” rating.
Risk warning: Consumption recovery falls short of expectations, insufficient customer willingness to invest, and customer industry regulatory risks.