MEITUAN(03690)2024-06-06 08:30Revenue Growth - Revenue increased by 25.0% from RMB 586 billion in Q1 2023 to RMB 733 billion in Q1 2024, driven by growth in both core local commerce and new initiatives segments[8] - Revenue for Q1 2024 grew 25.0% year-over-year to RMB 73.276 billion, driven by strong performance in core local commerce and new business segments[72] - Revenue for Q1 2024 increased by 25.0% year-over-year to RMB 73.3 billion, with core local commerce revenue growing by 27.4% to RMB 54.6 billion[82][83] - Revenue for Q1 2024 reached RMB 73.28 billion, a 25% increase compared to RMB 58.62 billion in Q1 2023[131] Core Local Commerce Performance - Core local commerce revenue grew by 27.4% from RMB 429 billion in Q1 2023 to RMB 546 billion in Q1 2024, primarily due to increased transaction volume and higher online marketing revenue[11] - Core local commerce revenue reached RMB 54.626 billion in Q1 2024, with delivery services contributing RMB 21.065 billion and commission income at RMB 20.034 billion[63] - Core local commerce operating profit rose by 2.7% to RMB 9.7 billion, with an operating profit margin of 17.8%[83] - Core local commerce segment operating profit increased from RMB 9.4 billion in Q1 2023 to RMB 9.7 billion in Q1 2024, with operating profit margin decreasing from 22.0% to 17.8%, a drop of 4.2 percentage points[31] - Core local commerce operating profit increased to RMB 9.7 billion in Q1 2024 from RMB 8.0 billion in Q4 2023, with operating profit margin rising from 14.5% to 17.8%[108] - Core local commerce revenue decreased by 0.9% QoQ to RMB 54.6 billion, primarily due to reduced instant delivery transactions and lower merchant marketing spending during holidays, partially offset by growth in hotel and travel business revenue[93] New Business Segment Performance - New initiatives revenue rose by 18.5% from RMB 157 billion in Q1 2023 to RMB 187 billion in Q1 2024, mainly driven by growth in the retail business[11] - New business segment's operating loss narrowed to RMB 2.8 billion in Q1 2024 from RMB 5.0 billion in Q1 2023, with the loss margin improving by 17.2 percentage points to 14.8%[59] - New business segment narrowed its operating loss to RMB 2.8 billion from RMB 5.0 billion in the same period last year[82] - The company's new business segment revenue increased by 18.5% YoY to RMB 18.7 billion, with operating losses narrowing by 45.2% to RMB 2.8 billion, resulting in an improved operating loss margin of 14.8%[89] - New business operating loss narrowed to RMB 2.8 billion in Q1 2024 from RMB 4.8 billion in Q4 2023, with operating loss margin improving from 26.0% to 14.8%[110] Cost and Expense Management - Cost of sales increased by 22.6% from RMB 388 billion in Q1 2023 to RMB 476 billion in Q1 2024, with the cost-to-revenue ratio decreasing by 1.3 percentage points to 64.9%[14] - Sales and marketing expenses grew by 33.1% from RMB 104 billion in Q1 2023 to RMB 139 billion in Q1 2024, accounting for 19.0% of revenue, up 1.2 percentage points year-over-year[16] - R&D expenses remained stable at RMB 50 billion in Q1 2024, with the expense-to-revenue ratio decreasing by 1.8 percentage points to 6.8%[17] - General and administrative expenses increased by 15.2% from RMB 20 billion in Q1 2023 to RMB 23 billion in Q1 2024, maintaining a stable expense-to-revenue ratio of 3.1%[18] - Sales and marketing expenses decreased by 17.0% QoQ to RMB 13.9 billion, accounting for 19.0% of revenue, down 3.7 percentage points, mainly due to reduced user incentives and promotional spending[98] - R&D expenses decreased by 7.8% QoQ to RMB 5.0 billion, accounting for 6.8% of revenue, down 0.6 percentage points, reflecting efforts to improve operational efficiency[100] - General and administrative expenses decreased by 14.9% QoQ to RMB 2.3 billion, accounting for 3.1% of revenue, down 0.6 percentage points, also due to improved operational efficiency[101] - The company's cost of sales decreased by 2.3% QoQ to RMB 47.6 billion, accounting for 64.9% of revenue, down 1.2 percentage points, mainly due to improved gross margins in the retail business[97] Profitability and Margins - Operating profit for Q1 2024 reached RMB 5.209 billion, with an operating profit margin of 7.1%, compared to RMB 3.586 billion and 6.1% in Q1 2023[55] - Net profit for Q1 2024 was RMB 5.369 billion, a 59.9% increase compared to RMB 3.358 billion in Q1 2023[72] - Adjusted EBITDA for Q1 2024 was RMB 8.070 billion, up 28.9% from RMB 6.262 billion in Q1 2023[72] - Adjusted EBITDA and adjusted net profit increased to RMB 8.1 billion and RMB 7.5 billion, respectively[82] - Operating profit for Q1 2024 was RMB 5.2 billion with an operating profit margin of 7.1%, compared to RMB 1.8 billion and 2.4% in Q4 2023[105] - Net profit attributable to equity holders increased to RMB 5.4 billion in Q1 2024 from RMB 2.2 billion in Q4 2023[112] - Adjusted EBITDA for Q1 2024 was RMB 8.1 billion, compared to RMB 6.3 billion in Q1 2023 and RMB 3.7 billion in Q4 2023[123] - Gross profit for Q1 2024 was RMB 25.697 billion, up from RMB 24.993 billion in Q4 2023, reflecting improved cost management[62] - Gross profit for Q1 2024 was RMB 25.70 billion, up 29.7% from RMB 19.82 billion in Q1 2023[131] - Operating profit for Q1 2024 stood at RMB 5.21 billion, a 45.3% increase from RMB 3.59 billion in Q1 2023[131] - Net profit attributable to the company's shareholders in Q1 2024 was RMB 5.37 billion, a 59.9% increase from RMB 3.36 billion in Q1 2023[131] Cash Flow and Financial Position - The company repurchased 82,508,300 Class B shares for a total consideration of HKD 7,173,699,610.55 during the period up to the announcement date[1] - Cash and cash equivalents stood at RMB 50.8 billion, with short-term financial investments at RMB 87.8 billion as of March 31, 2024[82] - Net cash generated from operating activities in Q1 2024 was RMB 6.0 billion, primarily due to pre-tax profit and adjustments for non-cash items and changes in working capital[124] - Cash and cash equivalents plus short-term financial investments totaled RMB 138.6 billion as of March 31, 2024[118] - Net cash generated from investing activities in Q1 2024 was RMB 23.3 billion, primarily due to proceeds from disposal of investments[119] - Net cash used in financing activities in Q1 2024 was RMB 11.9 billion, mainly due to repayment of borrowings[119] - Net cash flow from investing activities in Q1 2024 was RMB 23.3 billion, primarily driven by net cash from financial investments, partially offset by purchases of property, plant, and equipment and other investments[126] - Net cash flow used in financing activities in Q1 2024 was RMB 11.9 billion, mainly due to repayment of borrowings and interest, as well as the repurchase of Class B shares[127] - The capital-debt ratio as of March 31, 2024, was approximately 30%, calculated as total borrowings and notes payable divided by total equity attributable to the company's shareholders[128] - Total assets as of March 31, 2024, were RMB 285.31 billion, a slight decrease from RMB 293.03 billion as of December 31, 2023[132] - Total liabilities as of March 31, 2024, were RMB 128.57 billion, down from RMB 141.07 billion as of December 31, 2023[133] Other Income and Expenses - Net other income increased to RMB 1.4 billion in Q1 2024 from RMB 1.3 billion in Q1 2023, driven by fair value changes in financial investments[21] - Financial assets impairment losses decreased to RMB 175.4 million in Q1 2024 from RMB 255.3 million in Q1 2023, reflecting changes in expected credit losses[19] - The company's equity-accounted investments turned a profit of RMB 314.2 million in Q1 2024, compared to a loss of RMB 49.8 million in Q1 2023[60] - Share-based compensation expenses were RMB 1.9 billion in Q1 2024, slightly lower than RMB 1.9 billion in Q4 2023[123] - Depreciation and amortization expenses were RMB 1.9 billion in Q1 2024, compared to RMB 1.9 billion in Q4 2023[123] Corporate Governance and Compliance - The company's interim financial data for the three months ended March 31, 2024, is unaudited and should be read together with the 2023 financial statements, which were prepared in accordance with International Financial Reporting Standards[22] - The company has adopted the principles and code provisions of the Corporate Governance Code as the basis for its corporate governance practices, with the exception of Code Provision C.2.1, which requires the separation of the roles of chairman and CEO[24] - The company's chairman and CEO roles are currently held by Mr. Wang Xing, as the board believes this arrangement ensures consistent internal leadership and more effective and efficient strategic planning[24] - The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as the code of conduct for directors' securities transactions, and all directors confirmed compliance with the code during the three months ended March 31, 2024[25] - No significant events affecting the company have occurred since March 31, 2024, other than those disclosed in the report[26] - The company's forward-looking statements in the announcement are based on subjective expectations, assumptions, and premises, and involve significant risks and uncertainties, and should not be overly relied upon by investors[30] Operational Highlights - Domestic hotel room nights and transaction value in the hotel and travel business achieved strong year-over-year growth in Q1 2024, particularly in niche destinations and lower-tier cities[65] - Meituan Youxuan's operational efficiency improved significantly in Q1 2024, with reduced per-unit fulfillment costs and enhanced marketing efficiency, leading to a narrowing of operating losses[66] - Instant delivery transactions grew by 28.1% year-over-year to 5.46 billion[76] - Meituan Maicai's daily order volume reached a new high in Q1, driven by improved consumer experience and operational enhancements[84] - Meituan Flash maintained rapid growth, with a significant increase in transaction users and frequency, and expanded its "Meituan Flash Warehouse" to approximately 7,000 locations[86] - The company expanded its "Meituan Official Live Streaming" to more regions and increased live streaming frequency, leading to rapid growth in merchant participation[87] - The company implemented a direct operation model nationwide, enabling entry into lower-tier markets and benefiting from digital transformation and strong consumption potential in these areas[87] - The company's gross merchandise value (GMV) for core local commerce was RMB 547.3 billion in Q1 2024, slightly down from RMB 551.3 billion in Q4 2023[92]