Citi has released a research report stating that Meituan-W (03690) is expected to announce its third-quarter results in late November, with overall figures likely broadly in line with the bank's and market expectations. The bank is maintaining its earnings forecasts for the company, reiterating its "Buy" rating and keeping its target price at HK$120.
The bank forecasts Meituan's third-quarter total revenue at RMB 114.2 billion, representing a 20% year-on-year increase, with adjusted net profit of RMB 2.56 billion. Market consensus expects total revenue and adjusted net profit of RMB 113.3 billion and RMB 2.2 billion, respectively.
The bank expects Meituan's third-quarter core local commerce revenue to grow approximately 15% year-on-year to RMB 77.3 billion, with operating profit of RMB 4.15 billion. The food delivery business operating margin is projected at 1.1%, with per-order economic benefit of 8 cents.
Looking ahead to the fourth quarter, the bank anticipates that seasonal factors and colder weather may drive up rider costs, but Meituan's continued cost control and operational efficiency should support sequential improvement in per-order economic benefit. The bank expects the in-store business operating margin to remain broadly stable.
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