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) Rating Change]: Meituan’s Counterstrike Is Effective, Upgrade to BUY

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

Meituan’s Recent Expansion in Hong Kong: A Review

China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>Meituan reported C4Q22 total revenue 4% higher than cons. Non-IFRS net margin beat cons. by 0.4ppt due to strong cost control during lockdowns.  </li>
<li>Meituan has limited options against Douyin’s fast expansion of new service categories and customized offerings. The competition against Douyin will continue to pressure the in-store business in the long run.</li>
<li>Maintain SELL and cut TP to HK$125. Our TP implies 3x PS, 10x PE and 1x PS for on-demand delivery, in-store, and new initiatives, respectively.</li>
</ul>


Meituan reported C4Q22 total revenue 4% higher than cons. Non-IFRS net margin beat cons. by 0.4ppt due to strong cost control during lockdowns.  
Meituan has limited options against Douyin’s fast expansion of new service categories and customized offerings. The competition against Douyin will continue to pressure the in-store business in the long run.
Maintain SELL and cut TP to HK$125. Our TP implies 3x PS, 10x PE and 1x PS for on-demand delivery, in-store, and new initiatives, respectively.


[Meituan (3690 HK) Target Price Change]: Bracing for Douyin Impact with Limited War Chest