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Meituan Class B 03690 Stock Quote

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Morningstar‘s Stock Analysis 03690

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Is it the right time to buy or sell?

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Meituan Instashopping Adds More Orders but Offset by Food Delivery Slowdown; Maintain HKD 165 FVE

Kai Wang, CFA Senior Equity Analyst

Analyst Note

| Kai Wang, CFA |

We maintain our fair value estimate at HKD 165 for no-moat Meituan after the company reported mixed results for second-quarter 2022, and we believe that the market is overvaluing Meituan, given the addition of its Instashopping segment to its core business as a long-term viable unit. Better-than-expected revenue of CNY 50.9 billion beat our estimate of CNY 47.6 billion, representing a 16% increase year on year. Losses also narrowed, which was encouraging, and should accelerate Meituan's breakeven date. However, food orders grew by only 5% year on year and the number of customers declined to 685 from 693 sequentially for the first time, which may imply Meituan has reached a saturation point. 

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Key Statistics 03690

Company Profile 03690

Business Description

Meituan is the largest food delivery service in China, with a 70.7% share of the food delivery 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. However, 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, and overtake food delivery as its main business.

No. 4 Wang Jing East Road, Block B and C, Hengjiweiye Building
Beijing, 100102, China, People's Republic of
T +86 10107888
Industry Internet Retail
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2022
Employees 90,472