MEITUAN(03690) 国信证券·2024-06-24 09:31Investment Rating - The report maintains an "Outperform" rating for Meituan, with a target price range of HKD 125-144 [136] Core Views - Meituan's local life business reorganization is expected to bring continuous optimization in operational efficiency, particularly through the integration of its home delivery, in-store, and platform businesses [2] - TikTok's local life business is facing challenges in achieving its annual GTV target, with a focus on post-cancellation GTV and profitability [9][10] - Meituan's strategy focuses on consolidating long-term competitive advantages rather than merely pursuing market share, with a shift from subsidy-driven growth to ROI-driven growth [42] Meituan's Local Life Business Progress - Meituan's local life business reorganization in early 2024 aims to integrate home delivery, in-store, and platform operations under a unified leadership, expected to enhance operational efficiency [2] - Meituan's in-store and hotel business strategy emphasizes expanding the merchant base, improving price competitiveness, and exploring low-tier cities through direct operations [34][36] - Meituan's in-store and hotel business has maintained stable market share through subsidies, with a focus on enriching product offerings and leveraging live streaming to drive impulse purchases [37][49] - Meituan's in-store and hotel business operating profit margin (OPM) declined from 48% in Q1 2023 to 29% in Q4 2023 due to increased competition and subsidies, but showed a slight recovery to 31% in Q1 2024 [42][55] TikTok's Local Life Business Progress - TikTok's local life business GTV grew from RMB 77 billion in 2022 to nearly RMB 300 billion in 2023, but faces challenges in achieving its 2024 target of RMB 600 billion [9][42] - TikTok's local life business is focusing on post-cancellation GTV and profitability, with adjustments to sales compensation structures and a shift towards advertising as a key revenue driver [10] - TikTok's local life business has undergone organizational restructuring, with a focus on regional divisions to improve sales efficiency and merchant acquisition [13] - TikTok's local life business GTV growth is driven by increasing merchant coverage and category expansion, with GTV growth rates of 256% YoY in 2023, led by the hotel and travel sector [15] Competitive Landscape - Meituan and TikTok are adopting differentiated competitive strategies, with Meituan focusing on operational efficiency and TikTok leveraging its product strengths to explore new categories [42][129] - Meituan's core advantage lies in its evaluation system, which supports long-term merchant operations, while TikTok excels in short-term explosive growth through its product and marketing capabilities [81][95] - TikTok's local life business is more suitable for large KA merchants, while Meituan's strength lies in serving small and medium-sized merchants [97][101] Financial Projections - Meituan's in-store and hotel business is expected to achieve a 17% CAGR in operating profit from 2023 to 2025 under a neutral scenario [133] - Meituan's adjusted net profit is projected to reach RMB 36.6 billion, RMB 49.1 billion, and RMB 58.3 billion in 2024, 2025, and 2026, respectively, with a PE ratio of 19x, 14x, and 12x [136][151]