BOCOM International·2025-05-27 08:54Investment Rating - The report maintains a "Buy" rating for Meituan (3690 HK) with a target price adjusted to HKD 165.00, indicating a potential upside of 27.5% from the current price of HKD 129.40 [1][4][15]. Core Insights - The report highlights the increasing competition in the food delivery market, but remains optimistic about Meituan's operational capabilities in this sector. The company is expected to enhance its market share despite the competitive landscape [2][7]. - Financial projections indicate significant revenue growth, with expected revenues of RMB 388.9 billion in 2025, reflecting a year-on-year growth of 15.2% [3][16]. - The adjusted net profit for 2025 is projected to be RMB 47.0 billion, with a notable increase in earnings per share (EPS) to RMB 7.58, representing an 8.4% growth compared to the previous year [3][16]. Financial Overview - Revenue Forecast: - 2023: RMB 276.7 billion - 2024: RMB 337.6 billion - 2025E: RMB 388.9 billion - 2026E: RMB 436.1 billion - 2027E: RMB 472.5 billion - Year-on-year growth rates are projected to decline gradually from 25.8% in 2023 to 8.3% in 2027 [3][16]. - Net Profit Forecast: - 2023: RMB 23.3 billion - 2024: RMB 43.8 billion - 2025E: RMB 47.0 billion - 2026E: RMB 60.4 billion - 2027E: RMB 68.7 billion - The net profit growth rate is expected to be particularly high in 2023 at 715.5%, tapering to 13.8% by 2027 [3][16]. - Earnings Per Share (EPS): - 2023: RMB 3.71 - 2024: RMB 7.00 - 2025E: RMB 7.58 - 2026E: RMB 9.73 - 2027E: RMB 11.08 - The EPS is expected to show a significant increase in 2024, followed by more moderate growth in subsequent years [3][16]. - Valuation Metrics: - The price-to-earnings (P/E) ratio is projected to decrease from 32.0 in 2023 to 10.7 by 2027, indicating an improving valuation as earnings grow [3][16]. Business Segment Performance - Core Business: - The core local business is expected to generate substantial revenue, with a projected revenue of RMB 283.4 billion in 2025, growing at a rate of 10% year-on-year [10][16]. - New Business: - The new business segment is anticipated to grow at a rate of 22% in 2025, although it is expected to incur losses of approximately RMB 26 billion due to increased investments in overseas markets [7][10]. Market Position and Strategy - Meituan is expected to increase its investment in the food delivery segment to maintain its market share amidst rising competition. The report anticipates a mid-to-high single-digit growth in food delivery order volume [7][10]. - The company is also expanding its international presence, particularly in markets like Saudi Arabia and Brazil, with plans to invest USD 1 billion over the next five years [7][10].