[ET Net News Agency, 9 October 2019] Nomura initiated coverage on Meituan Dianping
(MD)(03690) with a "buy" rating and a target price of HK$107.
The research house said MD is China's leading online service platform, with a focus on
food-related services. It operates two flagship apps: (1) the Meituan app, which has 292mn
MAUs (monthly active users) and provides a marketplace to service providers; and (2) the
Dianping app, which has 116mn MAUs and assists consumers in discovering lifestyle services
backed by its huge library of user-generated reviews.
MD facilitated a total of 9.5bn service transactions between 5.8mn service providers and
400mn consumers that generated CNY516bn in gross transaction value (GTV) in 2018. Food
delivery is MD's most popular service, generating over half of its GTV.
Nomura projected MD's revenue to maintain a solid 35% CAGR in 2019-21, driven by a 19%
CAGR in GTV while the overall monetization rate may also improve from 13% in 2018 to 19%
in 2019 with strengthening bargaining power and easing competition.
It expects its non-GAAP operating margin to improve from -14% in 2018 to 9% in 2021.
(KL)