UBS cut Meituan’s target price to HK$190, rating kept at Buy

 

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Chinese food delivery giant Meituan announced estimate-beating earnings for the second quarter of the year and despite the competition from Douyin, Meituan’s operating profit margin for its in-store, hotel and travel business remained robust at about 33% – 37%, UBS said in a note.

The broker said that a clearer picture on how Meituan’s market share and profit in the local services segment will change is emerging, and investors will likely grow more optimistic on the company. 

UBS raised the forecast of Meituan’s 2023-24 revenue to 277.3 billion yuan and 337.7 billion yuan, implying a year–on-year growth of 26.1% and 21.8%, respectively. The forecast of its adjusted EBITDA were ramped up by 1.8% and 1.4%, respectively. 

UBS cut the target price of Meituan’s target price from HK$200 to HK$190, keeping its rating at Buy.