Greater China Daily: Comprehensive Company Analysis
Date: December 2, 2024
Broker: UOB Kay Hian
Meituan: Solid Performance and Future Prospects
Meituan, a prominent Chinese group buying website specializing in locally found food delivery services, consumer products, and retail services, delivered an impressive performance in 3Q24. The company’s total revenue surged by 22% year-on-year, reaching Rmb93.6 billion, aligning with both company and street estimates. Notably, Meituan’s Non-IFRS net profit stood at Rmb12.8 billion, with a substantial net profit margin expansion of 6 percentage points year-on-year to 14%, exceeding consensus estimates.
Looking ahead to 2025, Meituan remains optimistic, driven by various growth catalysts. These include solid progress in overseas expansion, gradual rollout of consumption stimulus, and encouraging travel demand. The company maintains a “BUY” recommendation with a target price of HK\$222.00.
3Q24 Results
Meituan’s core local commerce segment recorded a revenue of Rmb69.4 billion in 3Q24, reflecting a stable growth of 20% year-on-year. The food delivery segment’s average order value saw a milder 3 percentage point year-on-year decline, with revenue rising 14% year-on-year. Meanwhile, the in-store hotel and travel order volume surged by 50% year-on-year, contributing significantly to overall growth.
Outlook for 4Q24 and 2025
The company forecasts revenue growth of 19% in 4Q24 and 15% in 2025. Core local commerce EBIT is expected to grow by 40% year-on-year. On-demand services are projected to maintain stable order volume growth, while the in-store services segment anticipates robust mid-40% year-on-year growth in order volume.
Investment and Expansion Plans
Meituan’s new initiatives segment delivered accelerated revenue growth of 29% year-on-year in 3Q24. The company plans to continue its focus on quality differentiation and expand its overseas operations. In 4Q24, Meituan Select will prioritize quality over market share expansion.
Overall, Meituan remains poised for growth, with strategic investments and expansion plans in place for 2025 and beyond.
Miniso: Strong Overseas Momentum and Growth Prospects
Miniso, a Chinese lifestyle department store brand known for its diverse range of products, reported a solid performance in 3Q24. The company’s revenue reached Rmb4,523 million, marking a 19% year-on-year increase. Notably, overseas revenue growth remained strong, reflecting the company’s effective expansion strategy.
Miniso maintains its 2024 targets while expressing increased confidence for 2025. The company expects both revenue and profit growth to accelerate in 2025, driven by scaling operations in overseas markets and enhanced cost control measures. Miniso’s “BUY” recommendation remains unchanged, with a target price of US\$29.30.
3Q24 Results
Domestic revenue growth was in line with expectations, while overseas revenue growth touched the high end of guidance. Miniso’s domestic operations contributed Rmb2,439 million, while overseas markets generated Rmb1,811 million, accounting for 40% of total revenue. The Top Toy segment also witnessed a significant revenue increase of 50% year-on-year.
Growth Strategy and Outlook
For 4Q24, Miniso anticipates revenue growth of 25-30% year-on-year, with domestic market revenue expected to grow in the low teens and overseas markets projected to jump 45-50%. The company plans to open additional stores in both domestic and overseas markets to support its growth targets.
Operational Efficiency and Future Plans
Miniso aims to enhance operational efficiency through strategic initiatives, including optimizing procurement costs and building a self-owned brand. The company is also exploring opportunities in the anime, comic, and game sectors to capture emerging trends in the market.
With a focus on expanding its overseas footprint and improving profitability, Miniso is well-positioned for continued growth in the coming years.
