First, what is the impact of the epidemic on Meituan?

1. Takeout orders slow down, non-catering takeout makes up for

Meituan was caused by the superposition of many factors, such as the extension of the Spring Festival holiday, the difficulties in opening restaurants affected by the epidemic, and the diners' higher hygiene requirements for food under the epidemic.Takeout business volume declinesSociete Generale expects GMV to fall by 20% in January 2020 compared with December. Meituan's countermeasures include the nationwide launch of "contactless distribution service" to enhance consumer experience and eliminate tension, and in view of the closure of small and medium-sized independent restaurants, Meituan timely provided 350 million yuan of special support funds for merchants and provided small and micro loans at no less than 10 billion preferential interest rate to ease the pressure on small and medium-sized businesses and achieve a smooth transition.

On the other handThe demand for non-catering takeout such as Shang Chao and medical orders increased significantly, which partly made up for the decline in catering takeout.. The proportion of non-food takeout was 5% Mur10% in 2019. Recently, orders for supermarkets, fresh food and medical services have increased. Public data from ele.me show that from January 21 to 31, taking Jinan as an example, medical orders increased by 24% month-on-month compared with December. Among them, face masks increased 18 times month-on-month, leisure orders also increased significantly, playing cards increased 103% month-on-month.

two。 The wine travel to the store is more directly affected, which will affect Meituan's performance in the first half of the year.

Orders for the hotel platform will be cancelled unscathed after January 25, and 2020Q1 hotel bookings are expected to decline off the cliff. The growth rate of arrival comprehensive business is expected to slow, offline entertainment consumption is reduced, and merchants' enthusiasm for advertising and bidding rankings is reduced, which is expected to have a certain impact on advertising revenue and profits.

According to 2019Q1, CITIC's impact on the revenue and profit end of the hotel and wine travel business is simply calculated. it is expected that in the neutral case, there will be about on the basis of the revenue and net profit of the hotel and wine travel business in 2020.The declines of 12.2% and 14.9%, because the wine tour currently contributes most of Meituan's operating profits, it will inevitably affect Meituan's overall business in the first half of the year.。

Second, organic in danger, rapid penetration of new retail business to open up room for growth

Under the epidemic, the client penetration and order volume of Meituan's flash purchase and vegetable purchase business are expected to rise to a higher level. During the Spring Festival in 2020, the average daily order volume of Meituan shopping in Beijing is 2-3 times that before the festival, and shows a continuous upward trend. It has opened more than 50 offline service stations in Beijing.

The data of the peers are also amazing: during the fresh Spring Festival of JD.com, the GMV increased by 215% compared with the same period last year, providing consumers with nearly 15000 tons of fresh products; Missfresh Limited's platform from New Year's Eve to the eighth day of the lunar new year actually received an increase of 350% compared with the same period last year; the order volume of SUNING's vegetable market increased by more than 650% from February 3 to 5 compared with the same period in December.

The epidemic situation confirms the flash purchase,The characteristics of the rigid demand + high frequency of the shopping business reflect the huge market space behind the data. Meituan, as the leader of local life, is expected to gain the largest incremental market.. Meituan's new business time window is likely to be ahead of market expectations.The potential growth space of the company is further opened up.

Third, the core assets of Hong Kong stocks that remain in the leading position and worthy of long-term allocation.

CITIC believes that after the epidemic, Meituan's various businesses will usher in rapid restorative growth, and actively pay attention to the rise of the new business model represented by buying vegetables.And valuation support under high certainty earnings expectations in 2021. China has enteredThe rapid release cycle of consumer demand for life services has a broad space.The absolute leading value of the company as a life service Internet platform, it is recommended asLong-term allocation of core assets of Hong Kong stocks。

In terms of valuation, Societe Generale Securities believes that Meituan takeout has gradually become clear, superimposing the advantages of wine and travel business and arrival ecology in the consumption scene in the same city, while innovative business continues to expand the boundary of life services, and uses SOTP to value Meituan according to the three major business attributes and growth types.

• Takeout: as the profitability of takeout business is in the climbing stage, we use PS valuation to give takeout 2020 3.8xPS with reference to overseas Grubhub, Just eat, Uber and other commission-based companies.

• For arrival business, refer to Trip.com and other OTA to give 25xPE.

• Innovative business due to continued investment, given to 2xPS, and superimposed net cash calculation valuation.

At the same time, considering the obvious effect of cross-selling among the various business sectors of the company, with the synergistic effects of flow entrance, data, distribution coordination, marketing, technology, management and so on, the overall premium is given to 5%.Adjust the company's target price to HK $125.2 according to SOTP valuation。