MEITUAN(03690) 华兴证券·2024-09-03 08:42Investment Rating - The report maintains a "Buy" rating for Meituan (3690 HK) with a target price of HK102.80 [2][5][12]. Core Insights - The report highlights strong growth in key segments, with a significant increase in order volume for the in-store, hotel, and travel business, which saw a year-on-year growth of 60% in Q2 2024. The operating profit margin is expected to improve to 34% due to stabilizing industry competition [6][11]. - The report also notes that the on-demand delivery segment, which includes food delivery and flash purchase, experienced a 14.2% year-on-year increase in order volume in Q2 2024, with total revenue growth estimated at 17% [11][30]. - The report projects that the core local business operating profit will grow by 28% year-on-year in 2024, up from a previous estimate of 16%, driven by improved profitability in food delivery, flash purchase, and in-store services [12][30]. Summary by Sections Financial Performance - Revenue for 2024 is projected at RMB 334,451 million, reflecting a 19% year-on-year growth, with adjusted EBITDA expected to reach RMB 44,161 million, a 24% increase [15][26]. - The adjusted net income for 2024 is forecasted at RMB 41,503 million, representing a 13% increase from previous estimates [15][26]. Segment Analysis - The in-store, hotel, and travel segment is expected to generate RMB 57,050 million in revenue for 2024, with a year-on-year growth of 25% [26][68]. - The on-demand delivery segment is projected to achieve a revenue growth of 18.7% in 2024, with a significant improvement in profitability due to reduced subsidies and enhanced operational efficiency [11][30]. Valuation - The report employs a sum-of-the-parts (SOTP) valuation approach, assigning a 15x P/E multiple to the food delivery business, resulting in a valuation of USD 65 billion, and a 0.8x P/GMV multiple for community e-commerce, leading to a valuation of USD 52 billion [17][19][30]. - The overall SOTP valuation for Meituan is estimated at HK193 [32].