On March 30th, Meituan released the 2019 Q4 financial report:

• Revenue in the fourth quarter of 2019 is 28.158 billion yuan, and the market is expected to be 26.724 billion yuan, compared with 19.8 billion yuan in the same period last year.

• The net profit in the fourth quarter of 2019 was 1.46 billion yuan, and the market expected loss was 580 million yuan, compared with a loss of 3.4 billion yuan in the same period last year.

• Adjusted net profit of 2.27 billion yuan in the fourth quarter of 2019

Judging from the data, it is another financial report that Meituan has far exceeded expectations. this is the third profit quarter of 19Q2 to Meituan. Meituan's share price has risen sharply after the results of the first two quarters have been released, so what about this quarter?

Let's take a look at the specific data:

I. the business of 19Q4 continues to be sound, and the trend of gross profit is good.

In terms of the proportion of gross profit structure, the gross profit contributed by the new business continues to expand, while the gross profit contributed by the takeout business decreases.

In terms of itemized income:

The revenue of takeout business increased by 42.8% compared with the same period last year, which is mainly driven by 1) the growth of users in third-tier cities and below; 2) the improvement of consumption level in low-line cities; and 3) the catering takeout membership system effectively promoted the significant increase in takeout orders for light foods, salads, desserts and beverages.

Meituan's revenue from wine and travel business increased by 38.4% compared with the same period last year.

New business and other revenues increased by 44.8% compared with the same period last year.

In terms of the changing trend of gross profit margin:

The overall gross profit margin continues to remain at around 35%.

At the same time, it can be seen that the gross profit margin of 19Q4 Meituan takeout business is 17.7%, compared with 13.4% in the same period last year. The month-on-month decline is mainly due to seasonal factors, and the subsidy for takeout riders has increased in winter.

The gross profit margin of the hotel wine and travel business continues to be robust, with a 2019Q4 of 88.8%, further reflecting the economies of scale.

The gross profit margin of the new business continues to expand to 21.2%, mainly due to 1) phasing out old bicycles and replacing new Meituan bikes; 2) improved distribution efficiency, Meituan flash purchase gross profit margin increased.

Second, what to watch: the proportion of online marketing (advertising) revenue continues to expand.

Another noteworthy point is Meituan's online marketing, that is, advertising's share of revenue continues to grow, with 2019Q4's share reaching 17.5%.

19Q4's online marketing revenue has been close to 5 billion yuan, and there is an obvious quarterly growth trend in 2019, mainly due to the increase in the number of active online marketing merchants and the average income of each online marketing active merchant.

Specific to takeout and arrival business:

Online marketing revenue of takeout business increased by 118.6% in 2019 compared with the same period last year.

Online marketing revenue from arrival business increased by 55% compared with the same period last year.

This shows that the optimization of merchant marketing solutions has expanded the proportion of advertising business with high gross profit margin in Meituan, and more and more merchants are willing to advertise on Meituan in order to gain attention.

The proportion of this business continues to expand and is an important profit growth point for Meituan.

3. 2020 under the influence of COVID-19 's epidemic situation

Meituan's financial report announced that the impact of COVID-19 's epidemic on him in 2020 is enormous.

This means that Meituan's business, including takeout and inbound wine travel, has a deterministic negative growth at both ends of supply and demand in the first quarter of 2020, while for the whole year, there is a high degree of uncertainty and it is unknown when it will return to the normal level.

What the capital market fears most is uncertainty. It is impossible to estimate how much impact it will have on Meituan's business in the face of a double kill between supply and demand in 2020. After short-term labor pains, whether it can recover in the long term is also a question, because it still faces strong competition from BABA.

Four and 2020 come from ele.me competition

1) ele.me has a reputation of 100 million daily active users and continues to reduce its commission

On March 16, BABA held the "2020 Merchants Conference" online. On the basis of previous anti-epidemic support measures for businesses, Wang Lei, partner of BABA Group and president of BABA Local Life Service Company, announced a number of new business empowerment plans.

"in the coming year, we will bring more than 100 million visitors a day to ele.me. We will continue to keep the commission at 3-5% below the level of the industry, and the preferential loan interest rate for businesses to fight the epidemic is 50% lower than that of other platforms. In the future, we will realize the complete digital upgrade of online and offline integration for 1 million merchants, and we will not charge a penny commission for the orders obtained by Mini Program. "

2) word-of-mouth ele.me announced the recruitment of 20, 000 riders, and 122000 riders have joined the hummingbird during the epidemic

On March 20, WOM ele.me announced that it would join local employment and poverty alleviation departments to provide more than 100000 jobs in catering, life services and other industries to 832 poor counties across the country. At the same time, word-of-mouth ele.me will recruit 20,000 hummingbird riders in 100 poor counties. In addition, word-of-mouth ele.me will also serve millions of businesses through training and cultivate more new digital jobs and talents.

Under the epidemic, restaurant food is not open for business, and many catering businesses save themselves through takeout. The demand for riders on ele.me platform is soaring. According to statistics, a total of 122000 new riders have joined the hummingbird platform since January 20.

Ele.me has BABA's father, who is not short of money. The competition from ele.me is always Meituan's nightmare. Once the two sides start a subsidy war, profits are bound to be affected. Now, although Meituan has temporarily gained an advantage in this ongoing war, ele.me announced a reduction in domestic service and recruited 20, 000 riders, which is even worse for Meituan, who was unlucky because of the epidemic in 2020.

Meituan is destined to spend a challenging 2020, how the future industry pattern will be interpreted, we need to pay close attention to.

Fortunately, as of December 31, 2019, Meituan had 13.4 billion yuan in cash and cash equivalents and 49.4 billion yuan in short-term investment.