In today’s briefing:
- Tencent Meituan Dividend – The US$17bn Overhang Is Here – Not All Shares in CCASS, Here We Go Again!
- Meituan (3690 HK): 4Q22, High Growth, Better Margin, and 45% Upside
- Meituan: Pandemic Driven Top Line Growth Is Only Temporary
- China Internet Weekly (27Mar2023): Douyin, Bilibili, Tencent, NetEase, JD Health, Zhihu
- Beyond the Blackboard
Tencent Meituan Dividend – The US$17bn Overhang Is Here – Not All Shares in CCASS, Here We Go Again!
- On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
- At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn
- We have covered the background of the event in our previous notes. In this note, we talk about the recent updates.
Meituan (3690 HK): 4Q22, High Growth, Better Margin, and 45% Upside
- In 4Q22, the growth rates of total revenue and most business lines are better than our expectation.
- The operating margins have stayed at a low level for the third quarter.
- We believe the stock has an upside of 45% and a price target of HK$204 for year end 2023.
Meituan: Pandemic Driven Top Line Growth Is Only Temporary
- Meituan (3690 HK) reported 4Q2022 results. Revenue increased 21.4% YoY to RMB60.1bn (vs consensus RMB57.7bn) while reported operating losses dropped to RMB732m (vs consensus RMB1.4bn) from RMB5.0bn in 4Q2021.
- Covid outbreak in China in 4Q2022 led to strong growth in food delivery service revenues, however, losses have widened compared to 3Q2022 due to increased rider costs and others.
- We expect Meituan’s top line growth to slow down and margins to remain under pressure with Douyin’s entry into food delivery and the company’s expansion into Hong Kong.
China Internet Weekly (27Mar2023): Douyin, Bilibili, Tencent, NetEase, JD Health, Zhihu
- Chinese Apps’ time on site decreased to 26.7 hours in 2022 from 28.5 hours in 2021.
- The Press and Publication Administration approved 27 imported games in March.
- Douyin launched a medium-duration video app, which can be Bilibili’s competitor.
Beyond the Blackboard
- The pandemic has been a catalyst for change, propelling the edtech sector to unprecedented heights as traditional educational institutions scrambled to adapt.
- However, as we enter 2023, the landscape has shifted significantly from the edtech boom of 2021.
- Companies now face the challenges of customer retention, unit economics, and the looming shadow of inflation and recession concerns.
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