CICC: Maintains Meituan-W target price at HKD 177, rating "Outperform the Industry"
CICC released a research report stating that it maintains its earnings forecast for Meituan-W, keeps an outperform rating and a target price of HKD 177, corresponding to 25/26 years 25/18 times adjusted price-to-earnings ratio and a 34.7% upside potential. The current stock price is trading at 25/26 years 18/14 times adjusted price-to-earnings ratio. The firm believes that the company has strong competitiveness, can focus on core business, and has the determination and patience to deal with competition. The firm pointed out that Meituan's preferred selection will further shrink, and it will focus on key business development, retaining operations only in places like Guangdong and Hangzhou. At the same time, Meituan's flash purchase and Little Elephant Supermarket will be prioritized, and the company will fully expand the flash purchase categories, further expand stores and lightning warehouses; continue to expand the coverage area of Little Elephant Supermarket, gradually extending to all first and second-tier cities. In addition, the company also emphasizes maintaining an active pace of overseas expansion. From a business perspective, the firm recognizes the company's pragmatic attitude, regardless of how much historical sunk cost there is, it can pragmatically assess the future space of the business and decide on resource allocation, focusing the company's limited energy on core business to better respond to domestic instant retail competition and overseas market opportunities
According to the Zhitong Finance APP, China International Capital Corporation (CICC) released a research report stating that it maintains its earnings forecast for Meituan-W (03690), keeps an outperform rating for the industry, and sets a target price of HKD 177, corresponding to 25/26 years 25/18 times adjusted price-to-earnings ratio with an upside potential of 34.7%. The current stock price is trading at 25/26 years 18/14 times adjusted price-to-earnings ratio. The firm believes that the company has strong competitiveness, can focus on core business, and has the determination and patience to cope with competition.
The firm pointed out that Meituan's preferred selection will further shrink, and it will focus on key business development, retaining operations only in regions such as Guangdong and Hangzhou. At the same time, the priority of Meituan's flash purchase and Little Elephant Supermarket will be elevated, and the company will comprehensively expand the flash purchase categories, further expand stores and lightning warehouses; continue to expand the coverage area of Little Elephant Supermarket, gradually extending to all first- and second-tier cities.
In addition, the company also emphasized maintaining an active pace of overseas expansion. From a business perspective, the firm recognizes the company's pragmatic attitude, regardless of how much the historical sunk cost is, it can pragmatically assess the future space of the business and decide on resource allocation, focusing the company's limited energy on core business to better cope with domestic instant retail competition and opportunities in overseas markets
