Financial News
Written by: Ou Jiajun
2020-08-20 14:50
Last update date: 2020-08-20 14:50Meituan-Dianping (3690), whose market value has hit 1.4 trillion Hong Kong dollars, will announce its second-quarter results this Friday (21st). The market expects the take-out business will resume positive growth, and its adjusted net profit will be a loss of 1.074 billion to a profit of 13.72 Between 100 million yuan (RMB. Same below). Huang Guoying, director of Fengsheng Financial Asset Management, pointed out that Meituan is a good example of a new economic business model. Buying funds takes a longer-term view. The performance of the short-term income statement is not important. It is concerned about the sustainability of user and sales growth. He also described that "Apple has a market value of 2 trillion US dollars." It is hard to imagine the market value of Meituan.
Meituan Dianping had a big hit earlier and was not included in the Hang Seng Index. It only became a constituent stock of the China National Index, but its share price continued to hit new highs. Huang Guoying said that the inclusion of the national index will certainly help the stock price. Another factor that stimulates the stock price to break the top may be that its business is mainly located in the country. The atmosphere is not as good as Tencent (0700) and Ali (9988), which will be affected by risks such as the Sino-US game.
Huang Guoying said that Meituan is a good example of a new economic business model. At the beginning, a user platform was established with huge marketing costs. After the platform and monopoly market are established, new users will share the operating costs and become available. Add a new business model at a lower cost. "After running smoothly, you will make a good profit. The most important thing is to operate a food (takeaway business) all the way to monopolize a market. Don’t burn money again. Light operating cost (operating cost) model".
Huang Guoying described that "Apple has a market value of US$2 trillion." It is hard to imagine the final market value of Meituan. (Photo by Zheng Zifeng)
Long-term funds focus on users and sales growth
He said that this is a relatively special business model, such as the more popular foreign platforms, DoorDash and Just Eat that are not listed, and the market has two sides. The purchase of Meituan’s funds will use a longer-term view. The performance of the income statement is not too important. The focus is on the sustainability of user growth and sales growth. Those who have doubts look at it from the perspective of recent P/E ratios and are not used to the establishment of the new economic platform just mentioned.
The market value of Meituan once touched 1.4 trillion Hong Kong dollars. Huang Guoying described "Apple has a market value of 2 trillion US dollars." It is difficult to imagine the final market value of Meituan. Simply put, it is assumed that Meituan can occupy 300 to 400 million after monopolizing the mainland market. Active users create tens of dollars in profits per capita each year.
Market participants Meituan’s non-GAAP adjusted net profit in the second quarter will result in a loss of 1.074 billion yuan to a profit of 1.372 billion yuan. The picture shows Chairman and Chief CEO Wang Xing. (Profile picture)
UBS: Long-term takeaway trend is positive
Meituan will announce its second-quarter results on Friday, and its stock price has soared by more than 80% in just one quarter since the first quarter's results were announced. The market predicts that the food delivery business will resume positive growth, and it will take time for the group’s highest gross margin to-store, hotel and travel business to recover. Comprehensive brokerages predict that Meituan’s non-GAAP adjusted net profit will lose 1.074 billion to 1.074 billion yuan. With a profit of 1.372 billion yuan, the median profit was 195 million yuan, down 87% year-on-year.
UBS issued a report in the middle of last month stating that the new crown epidemic has hit the demand for food delivery in the short term. Some people have switched to cooking at home, but the long-term trend of food delivery is still positive. It also expects that Meituan’s operating profit per catering order will increase from 0.8 yuan to In 2022, it will increase to 1 yuan; in the basic scenario, the profit per takeaway order is expected to rise to 1.5 yuan, and in the most optimistic scenario, the profit per order can reach more than 2 yuan. According to the bank, the popularity of Meituan's platform is better than that of its rivals. The frequency of orders and prices of respondents this year are higher than those in the past two years. More than half of the respondents said that Meituan is the most commonly used platform.
HSBC Research released a report this month, predicting that the compound annual growth rate of free cash flow from 2022 to 30 will increase from 17% to 21%, mainly due to the company's average daily orders reaching a record high in August, reaching 40 million. According to the bank, Meituan has a very high market share in some sinking cities (especially in the north), which gives the company more advantages in market competition, including obtaining more favorable conditions and stable delivery when negotiating with suppliers. Efficiency, and optimistic about its funding strategy, member ecology and business model.
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