美团-W：美团(3690 HK): 核心本地商业利润增长超预期，优选亏损继续环比收窄—维持优于大市; 上调目标价28％(Meituan: Core Local Business Profit Growth Exceeds Expectations, Preferre

Investment Rating - The report does not explicitly mention the investment rating for Meituan-W (3690 HK) [2][3] Core Views - Meituan reported 3Q24 revenue of RMB 93 6 billion, a YoY increase of 22 4% [3] - The company's core local commerce segment saw operating profit grow by 44 4% to RMB 14 6 billion, with an operating margin of 21 0%, up 3 5 percentage points YoY [4] - Meituan's new business segment achieved revenue of RMB 24 2 billion, a YoY increase of 28 9%, with operating losses narrowing by 79 9% to RMB 1 0 billion [4] - The company's cash and cash equivalents stood at RMB 42 5 billion as of September 30, 2024 [3] Operational Highlights - Meituan's instant delivery transaction volume reached 7 08 billion orders in 3Q24, a YoY increase of 14 5% [3] - Meituan Flash Delivery expanded to more lower-tier markets, with major retailers accelerating their presence [4] - The domestic hotel room nights continued to grow steadily, with the company collaborating with suppliers to offer more diverse options [4] - Meituan Youxuan's losses continued to narrow sequentially, while other new businesses achieved profitability as a whole in 3Q24 [4] - Keeta was officially launched in Riyadh, Saudi Arabia in October [4] Financial Performance - Meituan's total expenses in 3Q24 were RMB 26 0 billion, with an expense ratio of 27 83%, down 4 55 percentage points YoY [4] - Sales and marketing expenses increased by 6 2% to RMB 18 0 billion, but the expense ratio decreased by 2 9 percentage points to 19 2% [4] - R&D investment remained stable at RMB 5 3 billion, with the expense ratio decreasing by 1 3 percentage points to 5 7% [4] - Administrative expenses increased by 10 2% to RMB 2 8 billion, with the expense ratio remaining stable at 3 0% [4] - The company's net cash flow from operating activities was RMB 15 2 billion in 3Q24 [4] Financial Projections - Meituan's revenue is expected to grow from RMB 276 7 billion in 2023 to RMB 450 2 billion in 2026, with a CAGR of 14 43% [5] - Net profit is projected to increase from RMB 13 9 billion in 2023 to RMB 56 7 billion in 2026, with a CAGR of 23 20% [5] - The company's gross margin is forecasted to remain stable around 38 23% to 38 97% from 2024 to 2026 [5] - Return on equity is expected to be around 22 42% to 22 75% from 2024 to 2026 [5]