[ET Net News Agency, 28 August 2019] HSBC Global Research raised its target price for
Meituan Dianping (03690) to HK$90 from HK$82 and maintained its "buy" rating.
The research house said Meituan's profitability is a testimony of management's strong
execution and the scale advantages of its business model. We attribute profitability to
(1) mix shift, (2) rationalisation of food delivery competition, and (3) narrowing losses
in its new initiatives.
While management reiterates its priority of growth over profitability, given such an
upbeat quarter, HSBC lowered its 2019 net loss forecast to RMB2,883m (from RMB7,065m) and
raised its 2020-21 net profit estimate by 37% and 82%. (KL)