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Meituan Class B 03690

Morningstar Rating
HKD 121.90 −0.40 (0.33%)
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Company Report

Meituan: Expansion Into Saudi Arabia Unlikely to Bear Fruit, Signals Intensifying Domestic Pressures

After seeing news reports of Meituan launching its overseas food delivery operations, KeeTa, into Riyadh, Saudi Arabia, as its first international foray outside of Hong Kong, we do not believe that Meituan's expansion will be materially incremental to our current valuation given the long-term uncertainty, its market positioning in Saudi Arabia, and the near-term losses it will likely incur. We believe Meituan will not enjoy the advantage it has in China, which has helped it to grow its platform to 700 million users currently, given different market conditions in Saudi Arabia than China. We keep our fair value estimate unchanged at HKD 102.

Price vs Fair Value

03690 is trading at a 659% premium.
Price
HKD 122.30
Fair Value
HKD 373.00
Uncertainty
Very High
1-Star Price
HKD 948.70
5-Star Price
HKD 25.00
Economic Moat
Mrxjk
Capital Allocation
Mrcdt

Bulls Say, Bears Say

Bulls

CGB could become successful and operating margin-positive in three to five years.

Bears

CGB could end up being an unsuccessful business where Meituan exits or generates low-single-digit margins.

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News

Trading Information

Previous Close Price
HKD 122.30
Day Range
HKD 121.80125.90
52-Week Range
HKD 61.10150.00
Bid/Ask
HKD 121.90 / HKD 122.00
Market Cap
HKD 755.37 Bil
Volume/Avg
38.3 Mil / 41.9 Mil

Key Statistics

Price/Earnings (Normalized)
29.85
Price/Sales
2.51
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Meituan is the largest food delivery service in China, with a 70.7% share of the market in 2020 per the Chinese government. For the quarter-ended Sept. 30, 2021, the firm generated 54.2% of revenue from food delivery services, 17.7% from hotel booking, coupon sales, advertising, and 28.1% from new initiatives. In the long term, its new initiatives business may transform the company into an all-encompassing grocer and logistics business involving community group buying, nonfood delivery, and online grocery, overtaking food delivery as its main business.
Sector
Consumer Cyclical
Industry
Internet Retail
Stock Style Box
Large Growth
Total Number of Employees
114,860

Competitors

Valuation

Metric
03690
TCOM
PDD
Price/Earnings (Normalized)
29.8520.2721.18
Price/Book Value
4.542.087.22
Price/Sales
2.515.945.78
Price/Cash Flow
26.2220.7421.16
Price/Earnings
03690
TCOM
PDD

Financial Strength

Metric
03690
TCOM
PDD
Quick Ratio
1.571.081.50
Current Ratio
1.821.231.93
Interest Coverage
10.275.161,402.39
Quick Ratio
03690
TCOM
PDD

Profitability

Metric
03690
TCOM
PDD
Return on Assets (Normalized)
8.68%6.13%24.01%
Return on Equity (Normalized)
16.49%11.06%45.95%
Return on Invested Capital (Normalized)
11.89%7.65%36.17%
Return on Assets
03690
TCOM
PDD
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