{I-bank focus}Meituan's growth momentum remains strong

    Credit Suisse hosted a China internet tour visiting companies and industry contacts in Beijing from 17-18 September.
  From Meituan Dianping (03690), the research house said food delivery business growth momentum remains strong. Market competition stepped up a bit in August but should be offset by the gradual improvement in monetisation rate through more advertising, leaving a relatively steady GP margin.
  Medium-term, the company is focused on increasing customer order frequency (some early success seen from membership program) and adding delivery capacity on the supply side to drive growth.
  On the cost side, rider costs should see some improvement in 2H through efficiency gains. For in-store business, ad revenue still has upside driven by more product categories, higher ASP and increased penetration into the existing merchants base.
  On hotels, more marketing budget will be spent on customer subsidy to enhance customer conversion from food delivery business. The company will continue to invest in new business initiatives where it sees long-term potential but remain return-focused.
  Credit Suisse maintained its "outperform" rating, with a target price of HK$85.