Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>Local news reported an unnamed expert suggesting ByteDance might be buying Eleme for US$7bn, leading to share of Meituan to fall;</li>
<li>While we believe (1) buying a food delivery business to complement Douyin’s in-store business makes some sense and...</li>
<li>(2) ByteDance has been aggressive in pushing the boundary of its businesses, an entry into domestic food delivery is a daunting challenge that yields very little benefits for ByteDance;</li>
</ul>


Local news reported an unnamed expert suggesting ByteDance might be buying Eleme for US$7bn, leading to share of Meituan to fall;
While we believe (1) buying a food delivery business to complement Douyin’s in-store business makes some sense and...
(2) ByteDance has been aggressive in pushing the boundary of its businesses, an entry into domestic food delivery is a daunting challenge that yields very little benefits for ByteDance;


[Meituan (3690 HK, BUY, TP HK$118) Company Update]: Why ByteDance’s Purchase of Eleme Is a Bad Idea?

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>We don’t consider Douyin an existential threat to Meituan, but we see the company’s growth increasingly be constrained by its business model itself.</li>
<li>We believe Meituan will disappoint the market with regard to its bottom line growth in 2024, barring major overhaul of its new initiative businesses.</li>
<li>Meituan will have to make tough choice between growth and profitability and either scenario won’t bode well for its valuation. We value the company at RMB410 billion, meaning 18% downside.</li>
</ul>


We don’t consider Douyin an existential threat to Meituan, but we see the company’s growth increasingly be constrained by its business model itself.
We believe Meituan will disappoint the market with regard to its bottom line growth in 2024, barring major overhaul of its new initiative businesses.
Meituan will have to make tough choice between growth and profitability and either scenario won’t bode well for its valuation. We value the company at RMB410 billion, meaning 18% downside.


2024 High Conviction Idea: More Downside for Meituan

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>SOUTHBOUND flows the last several weeks clearly indicated a momentum move. The top net sells were all down. The top buys were all up. This week saw reversion.</li>
<li>SOUTHBOUND saw net buys of HK$3.5bn this week, breaking a nascent sell streak. Meituan dip-buying Wednesday to Friday was worth the entire net buy.</li>
<li>High-Div SOEs remain mixed. CNOOC (883) saw decent net buying, and China Mobile saw decent net selling. Again.</li>
</ul>


SOUTHBOUND flows the last several weeks clearly indicated a momentum move. The top net sells were all down. The top buys were all up. This week saw reversion.
SOUTHBOUND saw net buys of HK$3.5bn this week, breaking a nascent sell streak. Meituan dip-buying Wednesday to Friday was worth the entire net buy.
High-Div SOEs remain mixed. CNOOC (883) saw decent net buying, and China Mobile saw decent net selling. Again.


HK Connect SOUTHBOUND Flows (To 1 Dec 23); Meituan Dip-Buyings Leads Inflows; CNOOC Vs 941 on SOEs

<ul>
<li>Meituan reported C3Q23 top line (1.0%)/0.6% vs. our estimate/consensus, non-GAAP net income (9.7%)/8.3% vs our estimate/consensus. Subsidies and investment in in-store business is the main reason for bottom-line miss.</li>
<li>Meituan in-store GTV increased 90% YoY in 3Q23, effectively counteracted Douyin’s attack and maintained size ratio at 3:1 vs. Douyin in-store, which scarified profit.</li>
<li>Meituan OPM lowered 2.5ppt QoQ to 4.4% in 3Q23, and we expect it decline to 2.4% in 4Q23.</li>
</ul>


Meituan reported C3Q23 top line (1.0%)/0.6% vs. our estimate/consensus, non-GAAP net income (9.7%)/8.3% vs our estimate/consensus. Subsidies and investment in in-store business is the main reason for bottom-line miss.
Meituan in-store GTV increased 90% YoY in 3Q23, effectively counteracted Douyin’s attack and maintained size ratio at 3:1 vs. Douyin in-store, which scarified profit.
Meituan OPM lowered 2.5ppt QoQ to 4.4% in 3Q23, and we expect it decline to 2.4% in 4Q23.


[Meituan (3690 HK, BUY, TP HK$118) TP Change]: Deeply Cultivate Domestic While Wait for Overseas

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>The stock has been declining for about three years and plummeted after the 3Q23 results.</li>
<li>However, we believe MT and its corporate clients have been recovering and MT’s profits will rise by 129% in 2024.</li>
<li>We set an upside of 132% and a price target of HK$209 for 2024. Buy.</li>
</ul>


The stock has been declining for about three years and plummeted after the 3Q23 results.
However, we believe MT and its corporate clients have been recovering and MT’s profits will rise by 129% in 2024.
We set an upside of 132% and a price target of HK$209 for 2024. Buy.


2024 High Conviction: Meituan / MT (3690 HK) - Big Opportunity Emerging After Plunge

China

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

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Meituan (3690 HK)

[Meituan (3690 HK, BUY, TP HK$118) Company Update]: Why ByteDance’s Purchase of Eleme Is a Bad Idea?

Local news suggests that ByteDance may acquire Eleme for $7bn, causing Meituan's shares to drop. However, entering the food delivery market may...

Blue Lotus Research Institute

2024 High Conviction Idea: More Downside for Meituan

We believe Meituan will disappoint market in terms of bottom line growth in 2024 due to the constraints of its business model. We valued the...

Eric Chen

HK Connect SOUTHBOUND Flows (To 1 Dec 23); Meituan Dip-Buyings Leads Inflows; CNOOC Vs 941 on SOEs

Quiddity's SOUTHBOUND Connect Monitor: Large net buys on Meituan after the dip make up all of the last week's net buys. Other names see smaller...

Travis Lundy

[Meituan (3690 HK, BUY, TP HK$118) TP Change]: Deeply Cultivate Domestic While Wait for Overseas

Meituan's Q3 results show lower than expected top line and net income due to subsidies and investment in in-store business. Despite increased...

Blue Lotus Research Institute

2024 High Conviction: Meituan / MT (3690 HK) - Big Opportunity Emerging After Plunge

The stock has been declining for three years and plummeted after the 3Q23 results. However, we believe MT and its corporate clients have been...

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Meituan (3690 HK, BUY, TP HK$118) Company Update]: Why ByteDance’s Purchase of Eleme Is a Bad Idea?

​Local news suggests that ByteDance may acquire Eleme for $7bn, causing Meituan's shares to drop. However, entering the food delivery market may...

Blue Lotus Research Institute

2024 High Conviction Idea: More Downside for Meituan

We believe Meituan will disappoint market in terms of bottom line growth in 2024 due to the constraints of its business model. We valued the...

Eric Chen

HK Connect SOUTHBOUND Flows (To 1 Dec 23); Meituan Dip-Buyings Leads Inflows; CNOOC Vs 941 on SOEs

Quiddity's SOUTHBOUND Connect Monitor: Large net buys on Meituan after the dip make up all of the last week's net buys. Other names see smaller...

Travis Lundy

[Meituan (3690 HK, BUY, TP HK$118) TP Change]: Deeply Cultivate Domestic While Wait for Overseas

​Meituan's Q3 results show lower than expected top line and net income due to subsidies and investment in in-store business. Despite increased...

Blue Lotus Research Institute

2024 High Conviction: Meituan / MT (3690 HK) - Big Opportunity Emerging After Plunge

The stock has been declining for three years and plummeted after the 3Q23 results. However, we believe MT and its corporate clients have been...

Ming Lu

Local news suggests that ByteDance may acquire Eleme for $7bn, causing Meituan's shares to drop. However, entering the food delivery market may...

Meituan's Q3 results show lower than expected top line and net income due to subsidies and investment in in-store business. Despite increased...