MEITUAN(03690) 交银国际证券·2024-10-17 02:37Investment Rating - The report maintains a Buy rating for Meituan (3690 HK) with a target price of HKD 228, implying a potential upside of 24.2% from the current price of HKD 183.60 [1][2] Core Views - Meituan's profit growth trend is expected to remain sustainable, leading to an upward revision of 2025 profit forecasts and target price [1] - The company is expected to report a 21% YoY increase in total revenue for Q3 2024, slightly above Bloomberg/Visible Alpha (VA) consensus of 20% [1] - Net profit is projected to surge 98% YoY to RMB 11.4 billion in Q3 2024, with a net margin of 12.3%, outperforming Bloomberg/VA expectations of 106%/109% growth [1] - Local commerce (CLC) is expected to grow 20% YoY, with delivery order volume up 14%, revenue up 18%, and profit up 36% [1] - In-store, hotel, and travel (IHT) business is forecasted to grow 20% in revenue and 32% in profit, with a margin of 35% [1] - New businesses are expected to grow 25% YoY, with quarterly losses narrowing to RMB 1.86 billion [1] Financial Projections - Local commerce revenue is projected to grow 21% in 2024 and 18% in 2025, with adjusted operating profit increasing 30% and 27%, respectively [2] - IHT revenue is expected to accelerate, growing 23% in 2024 and 30% in 2025, with adjusted operating profit increasing 20% and 33%, respectively [2] - New business losses are expected to narrow further in 2025, following a trend of reduced losses in H2 2024 [2] - Adjusted net profit growth is forecasted at 78% in 2024 and 25% in 2025, with a 2025 PEG ratio of 1x and a P/E of 25x [2] Industry Position - Meituan maintains a leading position in China's instant retail and delivery industry [2] - The company's food delivery business, despite high online penetration, continues to meet diverse user needs through products like "Pinhao Fan" [2] - Flash delivery faces competition but has significant market potential, with scale effects and category diversification being key to monetization [2] - Local life services market competition is largely under control, with emerging industry investments still in early stages [2] Financial Data Highlights - Revenue is projected to grow from RMB 276.7 billion in 2023 to RMB 420.2 billion in 2026, with a CAGR of 8.7% from 2024 to 2026 [3] - Net profit is expected to increase from RMB 23.3 billion in 2023 to RMB 59.8 billion in 2026, with a CAGR of 15.5% from 2024 to 2026 [3] - EPS is forecasted to grow from RMB 3.71 in 2023 to RMB 9.59 in 2026 [3] - P/E ratio is expected to decline from 45.1x in 2023 to 17.5x in 2026, reflecting improving profitability [3]