Image Credits: digitalcrew
China’s leading one-stop life services platform
Figure 1: Meituan has greatly expanded its breadth of service offerings over the years
Food delivery is the company’s bread and butter
Figure 2: Revenue from food delivery segment accounts for nearly 60% of total revenue
Exceptional revenue and earnings growth
Figure 3: Meituan achieved its second consecutive quarterly operating profit
Figure 4: Revenue growth expected to persist as demand for online consumer services swells
Well-positioned to benefit from the increasingly digitalised consumption habits in China
Figure 5: GTV of the online consumer services market now accounts for nearly a fifth of the total consumer market’s GTV
Figure 6: China’s fast-growing pool of Internet users is a powerful catalyst for Internet companies like Meituan
Figure 7: Number of active merchants on Meituan has tripled in just three years
Huge potential for organic growth from cross-selling and seamless integration with WeChat
Key investment risks
A likely candidate to become China’s next Ten-Bagger
Table 1: Sum of the parts valuation for Meituan Dianping
|
Food Delivery |
|
|
2020E Food Delivery EBIT (CNY millions) |
13,120 |
|
PE Multiple (X) |
28X |
|
Estimated Fair Value (CNY millions) |
367,360 |
|
In-store / hotel, Travel |
|
|
2020E In-store / hotel EBIT (CNY millions) |
14,010 |
|
PE Multiple (X) |
25X |
|
Estimated Fair Value (CNY millions) |
350,250 |
|
Estimated Total Fair Value of Meituan after discount (HKD) |
718,378 |
|
Shares Outstanding (millions) |
5804 |
|
Estimated Fair Value Per Share |
HKD 123.8 |
|
Source: Company Data, iFAST Estimates Conglomerate discount, currency conversion assumptions apply |
|
Table 2: Strong earnings growth expected for Meituan as margins continue to improve
|
2018
|
2019 |
2020 |
2021 |
|
|
PE Ratio (X) |
- |
331.3 |
77.2 |
35.9 |
|
Earnings Growth |
- |
- |
328.0% |
130.3% |
|
EPS (CNY) |
- |
0.28 |
1.19 |
2.56 |
|
Source: Bloomberg, iFAST Compilations |
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