On Friday, Bernstein SocGen Group updated their outlook on Meituan Dianping (3690:HK) (OTC: OTC:MPNGF) shares, raising the price target to HK$130.00 from the previous HK$115.00 while maintaining an Outperform rating on the stock.
This adjustment follows the company's reported Q1 numbers, which showed a solid performance exceeding both the firm's and consensus estimates.
Meituan's Core Local Commerce revenue surpassed expectations by 5% and 7%, respectively, and demonstrated what was described as a slightly better performance than the usual margin by which the company outperforms estimates.
The company's adjusted EBITDA also exceeded the analyst's projection by 9%, while the Core Local Commerce operating profit saw an 11% beat.
The report highlighted a year-on-year growth in on-demand delivery volume of 28.1%, which is marginally higher than the 24.9% growth that had been anticipated.
Meituan's commentary around the quarter led to estimates of 24% and 23% growth in Food Delivery volume and revenue, respectively, for Q1. Additionally, In-store, Hotel & Travel (ISHT) revenue growth was estimated in the low-30% range, with a similar margin.
Despite these strong figures, the analyst noted a RMB900 million year-on-year increase in "Unallocated" expenses, a detail that might attract attention.
Nevertheless, the overall positive results have led to the increased confidence reflected in the revised price target for Meituan's shares.
In other recent news, Meituan, a significant player in the Chinese e-commerce arena, reported a notable rise in its fourth quarter and full year 2023 earnings.
The company's yearly revenue increased by 25.8% to RMB 276.7 billion, and the adjusted net profit reached RMB 23.3 billion. Key sectors such as food delivery, Instashopping, and the in-store, hotel & travel segments saw substantial growth.
Looking forward, Meituan has a positive outlook and plans to bolster its position through strategic initiatives and innovation investments. The company aims to reach breakeven on new initiatives by 2024 and continues to explore global expansion opportunities.
Despite facing a competitive landscape in food delivery and challenges in the online grocery business, Meituan maintains a strong leadership position and expects solid growth in food delivery volume in 2024.
These recent developments highlight Meituan's robust growth and strategic planning for future expansion. However, it is essential to note that these are projections and actual results may vary.
InvestingPro Insights
Following the upbeat analysis from Bernstein SocGen Group on Meituan Dianping (OTC: MPNGF), current InvestingPro data echoes this optimism, indicating a robust financial standing and market performance. With a Market Cap of approximately $87.71B and a P/E Ratio of 46.25, Meituan is positioned as a significant player in its industry. The company's strong revenue growth of 25.82% over the last twelve months as of Q4 2023, coupled with a Gross Profit Margin of 35.12%, underscores its efficient operations and market competitiveness.
InvestingPro Tips highlight Meituan's financial prudence, with the company holding more cash than debt on its balance sheet, which is a reassuring signal for investors. Additionally, analysts have revised their earnings upwards for the upcoming period, reflecting confidence in the company's future performance. Furthermore, with a PEG Ratio of just 0.16, Meituan is trading at a low price relative to near-term earnings growth, suggesting potential for investment value. It's worth noting that Meituan has been profitable over the last twelve months and is anticipated to maintain profitability this year.
For those seeking more in-depth analysis, InvestingPro offers additional tips, with 13 more insights available for Meituan. Investors interested in leveraging these insights can take advantage of an exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.