MEITUAN(03690) 华泰证券·2024-07-10 01:07Investment Rating - The report maintains a "Buy" rating for Meituan with a target price of HKD 149.50 [2][5] Core Investment Thesis - Meituan's "Pin Haofan" (拼好饭) introduces a new business model by leveraging group orders to enhance efficiency for users, merchants, and delivery riders [2][9] - The model focuses on "quantity for price" on the supply side and centralized delivery, significantly reducing per-order delivery costs [10][12] - The report forecasts Meituan's revenue for 2024-2026 at RMB 324.8/383.7/450.1 billion, with YoY growth of 17.4%/18.1%/17.3% [2] - Non-IFRS net profit is projected at RMB 37.7/53.4/70.0 billion, with YoY growth of 62.1%/41.6%/31.1% [2] Market Trends and Growth Drivers - Post-pandemic recovery has driven strong growth in the food delivery market, with a 45% YoY increase in 2023 [3] - Food delivery's share in the overall dining market rose from 3.9% in 2015 to 28.3% in 2023, highlighting its growing importance [3] - The trend towards cost-effective dining is evident, with the average per capita dining expenditure dropping from RMB 43.2 in 2022 to RMB 42.6 in 2023 [3] - Lower-tier cities show significant growth potential, with penetration rates below 15% compared to 21.5% in higher-tier cities [3] Pin Haofan's Business Model - Pin Haofan's innovation lies in its ability to negotiate lower prices with merchants and centralize delivery, reducing per-order delivery costs by 46% [12] - The model encourages group orders, allowing riders to deliver 2-3 times more orders in the same time frame, cutting delivery costs from RMB 7 to RMB 3.7 per order [12] - By 2025, Pin Haofan is expected to account for 10%-11% of Meituan's total delivery orders, contributing RMB 4.4-8.5 billion to profit improvement [17] User and Merchant Benefits - Users benefit from lower prices, with Pin Haofan offering discounts of 15%-40% compared to regular orders [30][87] - Merchants gain increased exposure and reduced preparation costs, particularly benefiting small and medium-sized businesses [28][62] - Delivery riders achieve higher efficiency through centralized delivery, with per-trip income increasing by 21% [93] Financial Projections and Valuation - Meituan's core local commerce revenue is expected to grow to RMB 2,438/2,927/3,507 billion in 2024-2026, driven by home delivery and in-store services [104] - The report values Meituan's home delivery business at HKD 81.0 based on a 20x 2024E PE, and the in-store business at HKD 54.4 based on a 20x 2024E PE [106][107] - The SOTP valuation for Meituan is HKD 149.5 per share, reflecting the combined value of its home delivery, in-store, and new businesses [107] Operational Efficiency and Profitability - Pin Haofan significantly improves the unit economics (UE) of low-priced orders, reducing losses by 61.2% compared to regular orders [69][70] - The model is expected to achieve breakeven when the average group order size reaches 4-5 orders per trip [102] - Meituan's overall UE improvement is driven by both the substitution of low-priced orders and the addition of new orders, with the former contributing more significantly [99]