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

MD, Blue Lotus Research Institute

Gu Jun, CFA

Equity Bottom-Up

<p>Our primary valuation of Meituan Dianping (Meituan) is US$ 156 bn. In this valuation, payable to merchant DCF reaches up to 162%, operating loss is (44%), capital expenditure is (18%.) Indeed, Meituan’s attraction is that its free cash flow already positive. Although the acquisition of Mobike causes the expansion of loss and the delay to reverse the operation loss in 2023, Meituan’s grand certainty leads to buy its stock at IPO.</p>

Our primary valuation of Meituan Dianping (Meituan) is US$ 156 bn. In this valuation, payable to merchant DCF reaches up to 162%, operating loss is (44%), capital expenditure is (18%.) Indeed, Meituan’s attraction is that its free cash flow already positive. Although the acquisition of Mobike causes the expansion of loss and the delay to reverse the operation loss in 2023, Meituan’s grand certainty leads to buy its stock at IPO.

Meituan Dianping IPO: Although Profitable in 2023, It Is Still Worth Purchasing the Stock