MEITUAN(03690) 华兴证券·2024-06-13 09:31Investment Rating - The report maintains a "Buy" rating and slightly raises the SOTP target price from HKD 175.00 to HKD 180.00 due to improved earnings prospects [1] Core Views - The valuation for the food delivery business is set at USD 57 billion using a 15x 2024 P/E, reflecting a 60% discount compared to the industry average of 37.5x due to a smaller Total Addressable Market (TAM) [1] - The valuation for the in-store, hotel, and tourism business is set at USD 38 billion, also using a 15x 2024 P/E, which is a 20% discount compared to the industry average of 19.2x, again due to a smaller TAM [1] - The community e-commerce and local retail business is valued at USD 51 billion using a 0.8x 2024 P/GMV, which is a 20% discount compared to the industry average of 1.0x [17] Financial Performance Summary - In Q1 2024, food delivery revenue is expected to grow by 23% year-on-year, slightly below the 24% growth in order volume, with average order value (AOV) declining due to subdued consumer spending [5] - The adjusted EBIT for Q1 2024 is projected to be RMB 5,209 million, reflecting a 45% year-on-year increase [10] - The adjusted net income for Q1 2024 is expected to be RMB 7,488 million, a 36% increase year-on-year [10] - The report forecasts total revenue growth of 18% for Q2 2024 and 19% for the full year 2024, with an adjusted EBIT margin of 13.1% for Q2 2024 [16] Business Segment Insights - The new business segment's losses narrowed to RMB 2.75 billion in Q1 2024, with expectations of further reductions in losses in subsequent quarters [6] - The in-store and hotel business is expected to accelerate profit growth as competition stabilizes [5] - The food delivery and flash purchase business saw significant order volume growth, with flash purchase turning profitable in Q1 2024 due to high-margin product contributions [5]