Orient Securities·2024-07-01 00:01Investment Rating - The report maintains a "Buy" rating for the company with a target price of 154.00 HKD [2][4][6] Core Insights - The report highlights the company's strong performance in Q1 2024, with revenue and profit exceeding expectations, driven by core local business growth and improved operational efficiency [5][8] - The company is expected to benefit from enhanced advertising monetization, cost optimization, and accelerated loss reduction in new businesses [4][5] Financial Performance - The company reported Q1 2024 revenue of 733 million CNY, a year-over-year increase of 25.0%, surpassing Bloomberg's consensus estimate of 690 million CNY [8] - Adjusted operating profit for Q1 2024 was 69 million CNY, with an operating profit margin of 9.5%, up from 7.5% in Q1 2023 [8] - The core local business generated revenue of 546 million CNY in Q1 2024, reflecting a year-over-year growth of 27.4% [8] Earnings Forecast - The company is projected to achieve earnings per share of 4.80 CNY in 2024, with further increases to 6.64 CNY in 2025 and 7.38 CNY in 2026 [4][31] - Revenue is expected to grow to 330.68 billion CNY in 2024, with a year-over-year growth rate of 19.49% [30][32] Segment Valuation - The report employs a segmented valuation approach, estimating the takeaway business at 3.3x PS, with projected revenue of 165.4 billion CNY in 2024 [6][33] - The in-store and hotel business is valued at 16.1x PE, with expected after-tax profits of 16.5 billion CNY in 2024 [6][33] - The community group buying segment is valued at 0.6x P/GMV, with a projected GMV of 100.9 billion CNY in 2024 [6][33] Market Context - The company operates in the media industry within China, facing competition from other local players [2][4] - The report notes a potential for improved profitability in the core local business due to reduced competition and market expansion [5][8]