The performance exceeded expectations: Meituan 24Q2 achieved operating income of 82.3 billion yuan, an increase of 21% over the previous year. Bloomberg's agreed forecast was 80.4 billion yuan; adjusted net profit was 13.6 billion yuan, and Bloomberg's agreed forecast was 10.3 billion yuan. The company's revenue and profit all exceeded expectations.
Profits from core local businesses and new businesses were better than expected. (1) Core local business: 24Q2 revenue of 60.7 billion (yoy +18.5%, qoq +11.1%), better than the agreed estimate of 59.9 billion yuan; operating profit was 15.2 billion (yoy +36.8%, qoq +57.1%), better than the agreed estimate of 12.3 billion yuan, and operating profit margin increased by 3 pct to 25.1% year over year. (2) New business: 24Q2 revenue of 21.6 billion yuan (yoy +28.7%, qoq +16%), better than the agreed forecast of 20.5 billion yuan; operating loss narrowed to 1.3 billion yuan, significantly better than the agreed forecast of 2.1 billion yuan, and the operating loss rate narrowed by 25 pct to 6.1% year over year. Considering that Q2 community group purchase losses continued to be better than expected, we expect the overall loss of the new business to narrow to around 8 billion yuan in 2024.
Takeout profits were better than our expectations, and the resilience of the platform was outstanding. The number of 24Q2 instant delivery transactions (food and beverage takeout+flash sales orders) was 6.167 billion, up 14.2% year over year, basically in line with consistent expectations. 1) Food and beverage takeout We estimate that the number of orders in 24Q2 increased 11% to 12% year over year. The company's refined operations and strategies further enhance user stickiness, user size and purchase frequency. Among them, the peak number of orders placed in Q2 in a single day reached a new high, breaking through 8 million orders. UE improved markedly year over year, mainly benefiting from increased advertising monetization rate (increased willingness of merchants to launch), rider cost optimization (sufficient rider supply+contribution to a well-prepared meal model), and improved subsidies, partly offset by a year-on-year decline in customer unit prices. Looking ahead to Q3, order volume and customer unit prices will continue to be under pressure, but UE's year-on-year upward trend has not changed. 2) The flash sales business continues to grow at a high rate. We estimate that the 24Q2 order volume increased by 35-40% year-on-year. Annual trading users have maintained steady growth, and the frequency of orders placed is growing faster. UE was also optimized year over month. We believe 2024 will be the year the value of flash sales retail channels begins to be highlighted, and we are optimistic that the subsequent scale of the business and profits will exceed expectations.
In-store wine tourism GTV has increased, and profit margins continue to recover. Q2 The number of in-store wine and travel orders increased by more than 60% year on year. Among them, Meituan's core advantage categories all performed well. For example, the transaction amount and order volume of the leisure and entertainment category all increased by more than 60% year over year, and the transaction amount in the beauty category increased by more than 50% year on year. The number of annual trading users and annual active merchants both reached record highs. Q2 We estimated the year-on-year growth rate of in-store wine travel revenue of 20% to 25%. The difference with GTV's growth rate has shrunk month-on-month, OPM has also improved month-on-month, and the negative impact of competition on the company's finances is gradually weakening. Looking ahead to Q3, business collaborations such as God's membership are expected to drive further improvements in the GTV and monetization efficiency of on-site wine tourism, and we continue to be optimistic about the subsequent increase in profits of this business.
Profit forecast and investment rating: Considering that the company's Q2 profit was better than our expectations, we raised the company's adjusted profit for 2024-2026 from 37.7/51.5/60.9 billion yuan to 41.5/51.9/66.2 billion yuan, corresponding to the 2024-2026 adjusted PE of 16/13/10 times, maintaining a “buy” rating.
Risk warning: Consumption recovery falls short of expectations, profit falls short of expectations, and the competitive landscape deteriorates