3690.HK: Positive on 1Q20 Performance On Higher Online Restaurant Penetration and Better Economics Per Order
We are positive on Meituan’s 1Q20 performance, which is benefiting from higher online penetration for restaurants and grocery stores post the outbreak. Our data shows that more restaurants are adopting online delivery to accomplish recovery. In 1Q20, Meituan Dianping’s food delivery business is likely to be better than the Street expectation. Delivery GTV is likely to decline 4.3% Y/Y to RMB72.4 billion, but per order economics is likely to be better in 1Q20 compared with 4Q19 and 1Q19 due to much higher average order value and a relatively sufficient supply of delivery workforce, which means less subsidizations.
MEITUAN DIANPING is a China-based e-commerce platform providing life services. The Company connects consumers and businesses to provide services satisfying people's daily eating needs. The Company owns an instant food ordering and delivery brand, Meituan, as well as provides services through its mobile application, Meituan. The Company is also engaged in the operation of a bike-sharing brand, Mobike.
T.H. Capital is an independent research and investment advisory firm specializing in China. We offers real-time, on-the-ground, bottom-up research across a wide spectrum from macro and industry analysis to company specific projects; from China ADRs to international names that have meaningful exposure to China market. We deliver relevant, comprehensive and data driven research adding immense value to clients.
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