New Street: Meituan 2Q21 Earnings - Despite Strength in Top Line, Margin Concerns to Persist

What's new: Meituan reported 2Q21 top-line results were above consensus and our estimates driven by resiliency across the major business segments. Operating losses in new initiatives including Meituan Select could further accelerate in 3Q as the company continues to build out infrastructure to drive growth which could weigh down margins in the near-term. We lower our PT from HKD350 to HKD300 on continued margin pressures related to ongoing investments and increasing operating costs. Our new PT of HKD300 implies a 5.9x EV/Sales multiple on FY22 revenues.

Jin Yoon
Meituan Dianping 3690 HK

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Jin Yoon

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