Daily Brief China: Meituan, Jiangxi Rimag Group, NetEase Inc, Golden Eagle Retail, Weibo Corp and more

• Meituan (3690 HK) ’s 1Q2023 earnings beat consensus estimates and the key highlight was the company turning into adjusted operating profits after two years.
• Revenue from Core local commerce continued to see strong growth in earnings though we expected growth rates to decline with pandemic conditions easing off.
• Meituan has launched its food delivery app “KeeTa” in Hong Kong which is dominated by Foodpanda and Deliveroo.

• Jiangxi Rimag Group (JIR HK), a China-based medical imaging center operator and provider of Rimag cloud services, filed for a Hong Kong IPO.
• Jiangxi Rimag Group (JIR HK) was backed by Goldman Sachs, leading VC firms in Asia, Baidu Inc., JD Health, and American healthcare investment firm OrbiMed. 
• China’s medical imaging industry is experiencing a remarkable transformation, driven by rapid technological advancements, evolving healthcare needs, and supportive government policies.

• NetEase reported in-line revenue for 1Q23, while non-GAAP net income exceeded our estimate by 22%. 
• <Justice Mobile> is set to launch by the end of June. We anticipate that investors may need to wait for some time after June for NetEase’s next potential hit title. 
• Maintain a BUY with TP unchanged, implying 18X PE in 2023.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Lenovo
2. Vedanta Resources
3. China Jinmao Holdings
4. Lifestyle International Holdings
5. Geely Auto

and more…

• Meituan reported 1Q23’s rev./non-IFRS net income 2.5%/126% vs. our est., the strong margin beat is due to efficiency improvements in all business lines;
• To compete with Douyin’s in-store business, Meituan will spend more in 2Q23, however FD and insta-shopping continue to have margin upside. 
• Our BUY thesis remains unchanged, as we believe investors overestimate Douyin’s impact, while underestimating Meituan’s ability to improve margins. 

• Weibo’s 1Q23 top line was in line with our est., and non-GAAP net income beat our est./cons. by 6.5%/ 7.6%, due to cost-saving measures. 
• While we dial down its 2Q23 revenue forecast, we remain optimistic about its growth in 2H23, as more brand advertisers gradually recover. 
• Maintain BUY and TP unchanged, which implies 12X PE in 2023.