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ASEAN (Indo) & China-focused. Ex-Deputy HoR UBS.

Johannes Salim, CFA

Equity Bottom-Up

<ul>
<li>Our deep-dive segment profitability analysis reveals that <a href="https://www.smartkarma.com/entities/26970" target="_blank" data-smartkarma-citation="entities:26970:1">Meituan Dianping's (3690 HK)</a> core business (combined food delivery and in-store, hotel &amp; travel) has made good progress toward profitability.</li>
<li>The ballooning consolidated operating losses mainly stem from new initiatives (particularly car hailing and Mobike).</li>
<li>Furthermore, lower S&amp;M expenses to sales ratio plus food delivery's higher take rate suggests that competition with Ele.me is more manageable than anticipated.</li>
<li>Our SOTP yields intrinsic value of HK$61.07/share, that represents 37% upside potential. </li>
</ul>


Our deep-dive segment profitability analysis reveals that Meituan Dianping's (3690 HK) core business (combined food delivery and in-store, hotel &amp; travel) has made good progress toward profitability.
The ballooning consolidated operating losses mainly stem from new initiatives (particularly car hailing and Mobike).
Furthermore, lower S&amp;M expenses to sales ratio plus food delivery's higher take rate suggests that competition with Ele.me is more manageable than anticipated.
Our SOTP yields intrinsic value of HK$61.07/share, that represents 37% upside potential. 


Meituan Dianping: Core Business Progress Toward Profitability an Overlooked Story?