China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

[Meituan (3690 HK, BUY, TP HK$165) Earnings Review]: Counterstrike Remains Effective… Maintain BUY

Meituan (3690 HK): Strong Bottom Line Growth Will Prove to Be Short-Lived

Meituan (3690 HK, BUY, TP US$170) Target Price Change: Consolidating Market Share… Maintain BUY

Meituan’s Recent Expansion in Hong Kong: A Review

Meituan's Strategies to Compete with Douyin: A Review of the Latest Three

China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>We expect that Meituan and Douyin engaged in fierce competition in 2Q23. Meituan intensified its efforts in three aspects: commission reduction and rebates, promotion of "Meituan Quanquan," and video subsidy. </li>
<li>However, our 2Q23 Meituan revenue/profit estimates are in-line/34% higher vs. cons. This is mainly because it was Meituan's first quarter of counterattack.</li>
<li>Meituan's counterattack has shown initial results, in Douyin’s slowing local services growth during 618, and the return of merchants. We maintain Meituan’s BUY rating, but lowered TP to HK$ 165.</li>
</ul>


We expect that Meituan and Douyin engaged in fierce competition in 2Q23. Meituan intensified its efforts in three aspects: commission reduction and rebates, promotion of "Meituan Quanquan," and video subsidy. 
However, our 2Q23 Meituan revenue/profit estimates are in-line/34% higher vs. cons. This is mainly because it was Meituan's first quarter of counterattack.
Meituan's counterattack has shown initial results, in Douyin’s slowing local services growth during 618, and the return of merchants. We maintain Meituan’s BUY rating, but lowered TP to HK$ 165.


[Meituan (3690 HK, BUY, TP HK$165) TP Change]: Competition with Douyin Continues, Cut TP to HK$165