EUR 214.35 For Business Accounts Only

3690.HK: Travel Restrictions During CNY Are Positive For Jan. and Feb. 2021; Expect Solid 4Q20 Performance; New Business Investment Pressuring Margin

Meituan will report 4Q20 results on March 26^th before the markets open with a 7am EST conference call. We are positive on its core business in 4Q20, January and February. In late 4Q20 and early 1Q21, China faced its worst resurgence of COVID cases in several northern provinces and cities since the pandemic first broke out there in early 2020. To combat the potential surge of cases, the Chinese government encouraged people to spend their Chinese New Year holidays where they were instead of traveling back to their hometown. As such, many customers who worked in top tier cities such as Beijing and Shenzhen spent CNY holidays in the cities and ordered food during those days. As a result, food delivery GTV and orders grew significantly in January and February due to both a low base and the above-mentioned special situation. Based on our data and calculation, Meituan’s 4Q20 revenue is likely to be better than consensus at RMB39,164M (39.1% Y/Y growth).