MEITUAN(03690) 甬兴证券·2024-07-17 02:31Investment Rating - The report initiates coverage on the company with a "Buy" rating [53][176] Core Views - The company is a leader in the local life services industry, with its main business focusing on local life services [28][51] - The company's overall revenue scale continues to grow, with 2023 full-year revenue reaching RMB 276.7 billion, a 26% YoY increase [10] - The company's gross profit margin has been rising since 2022, reaching 35% in 2023 [10] - The company's core local commerce business accounted for 74.76% of total revenue in 2023, up 1.7 percentage points from 2022 [34] - The company has made strategic adjustments to its organizational structure to address increasing competition, including promoting Wang Puzhong to lead the core local commerce business and having founder Wang Xing directly oversee international and exploratory tech businesses [52][108] Financial Performance - The company's instant delivery transaction volume has shown continuous growth in recent years, driven by the development of its membership system and the promotion of various online consumption scenarios [5][9] - The company's sales expense ratio has fluctuated within a range since its IPO in 2018, while the management expense ratio has steadily declined, and the financial expense ratio remains low [10][14] - The company's core local commerce business has maintained steady growth in operating profit, while new businesses have continued to incur losses, though the loss amount has narrowed quarter by quarter [39] Management and Governance - The company maintains stable management decision-making power through a dual-class share structure, with Class A shares having ten times the voting rights of Class B shares [15] - Wang Xing, the company's founder and chairman, holds approximately 44.33% of the voting rights, while Mu Rongjun, another co-founder, holds about 7.25% of the voting rights [15] - The company's management team is stable, with co-founders holding key positions and overseeing strategic planning and business operations [15][16] Industry and Competition - The company leads in the local life services industry, with its active user scale ranking first in the local life segment according to Questmobile data [28] - The entry of content platforms like Douyin into the local life services market has intensified competition, with Douyin showing a high overlap in user base with the company [52][100] - The local life services market is expected to reach RMB 35.3 trillion by 2025, with a CAGR of 12.6% from 2020 to 2025 [91] Strategic Initiatives - The company has made several organizational adjustments in 2024 to strengthen its core local commerce business and prioritize international and tech exploration businesses [102][108] - The company is advancing its AI and tech strategy through both investments and in-house R&D, including acquiring Lightyear Beyond and investing in Zhipu AI [114][166] - The company has launched AI applications like "Wow" and "Ask Xiaodai" to explore AI-driven social and shopping assistant functionalities [144][145] Financial Projections - The company's revenue is expected to grow to RMB 333.3 billion, RMB 382.9 billion, and RMB 438.2 billion in 2024, 2025, and 2026, respectively, with YoY growth rates of 20%, 15%, and 14% [53][175] - Net profit attributable to shareholders is projected to be RMB 27.5 billion, RMB 40.4 billion, and RMB 54.7 billion in 2024, 2025, and 2026, with YoY growth rates of 99%, 47%, and 35% [53][175] - Adjusted net profit is expected to reach RMB 36.5 billion, RMB 49.0 billion, and RMB 62.9 billion in 2024, 2025, and 2026, with YoY growth rates of 57%, 34%, and 28% [53][175]