Orient Securities·2024-09-03 01:41Investment Rating - The report maintains a "Buy" rating for the company with a target price of 158.37 HKD [18][21][28]. Core Insights - The company's Q2 2024 profits significantly exceeded expectations, with revenue of 82.3 billion CNY (up 21% year-over-year) and adjusted net profit of 13.6 billion CNY (up from 10.3 billion CNY expected) [3][21]. - The core local business showed robust growth, with revenue of 60.7 billion CNY (up 18.5% year-over-year) and adjusted operating profit of 15.2 billion CNY [3][21]. - New business revenue grew by 28.7% year-over-year to 21.6 billion CNY, with operating losses narrowing to 1.3 billion CNY [3][21]. Revenue and Profit Analysis - Q2 2024 revenue was 82.3 billion CNY, surpassing Bloomberg's consensus estimate of 80.4 billion CNY [3]. - Adjusted operating profit for Q2 2024 was 13.9 billion CNY, significantly higher than the expected 10.2 billion CNY, with an operating profit margin of 16.9% [3][21]. - The adjusted net profit margin improved to 16.5%, compared to 11.3% in Q2 2023 and 10.2% in Q1 2024 [3]. Business Segment Performance - Core Local Business: Revenue of 60.7 billion CNY, with a significant increase in operating profit to 15.2 billion CNY and an operating profit margin of 25.1% [3][21]. - Delivery Services: Q2 2024 saw a total of 6.167 billion orders, with a year-over-year growth of approximately 12% in delivery orders [3]. - Flash Purchase: Orders increased by nearly 35% year-over-year, achieving profitability in Q2 2024 [3]. - In-store and Travel Services: Orders grew over 60% year-over-year, with a focus on high-value products and expansion in lower-tier cities [3]. Valuation Methodology - The report employs a segmented valuation approach, assigning a PS ratio of 3.4x for the delivery business, a PE ratio of 14.4x for in-store and travel services, and a P/GMV ratio of 0.6x for new community group buying business [6][21]. - The estimated total market value of the company is 985.3 billion HKD, with a target price of 158.37 HKD per share [6][21].