Meituan poised for first profit in four quarters

Analyst

โดย HoonVision·

Summary · why it matters

Yuanta Securities said Meituan, or the Meituan19 depositary receipt, will report results late this month and expects short-term speculative buying, because Bloomberg consensus forecasts the company will return to profit for the first time in four quarters after Chinese authorities stepped in to curb price competition domestically, leading to a clear recovery in margins. The broker recommends watching Alibaba's earnings tonight; if margins recover well, that is expected to support Meituan as well. Although peer JD.com previously reported lower revenue, the market sees Meituan's revenue growing in the opposite direction because the main pressure on JD.com came from electrical appliances, while Meituan focuses on food delivery and restaurant services, and still has growth from new businesses such as online supermarkets, overseas food delivery, and business-to-business sales of food ingredients. Bloomberg consensus puts a target price of 1.54 baht per depositary receipt, implying 25 percent upside.