In today’s briefing:
- Meituan: Scaling Back Ride-Hailing Business to Maintain Margins
- [Kanzhun Ltd. (BZ US) Rating Change]: Nearing a Saturation Point…DG to SELL
- The Aftermath: What Happened to USDC?
Meituan: Scaling Back Ride-Hailing Business to Maintain Margins
- Several news media outlets reported last week that Meituan (3690 HK) is restructuring its ride-hailing services business to cut down costs as top line growth is slowing down.
- Meituan launched ride-hailing services as a stand-alone app in 2017, it was merged into Meituan Super App in 2019. Relaunched as a stand-alone app in 2021 following Didi’s app removal.
- Meituan has increased its headcount to compete with Douyin while has started hiring riders to launch services in Hong Kong which would likely to further drag down margins.
[Kanzhun Ltd. (BZ US) Rating Change]: Nearing a Saturation Point…DG to SELL
- We are concerned that BZ will incur higher sales marketing cost to maintain its increasingly sluggish MAU growth.
- We expect BZ to post C4Q22 revenue 2% higher than consensus, but with non-GAAP net margin 5.7ppt lower, due to lower GM and higher S&M.
- We downgrade BZ from BUY to SELL rating, and cut TP to US$12.4, imply 51x PE in 2023, and the stock currently trading at 76x PE in 2023.
The Aftermath: What Happened to USDC?
- In the hours following Sillicon Valley Bank’s collapse, news emerged that Circle, issuer of the USDC stablecoin, held $3.3bn of reserves in SVB, triggering panic that the stablecoin was no longer fully backed.
- As of Sunday night, we know that Circle’s reserves are safe, but over the weekend both centralized and decentralized markets descended into chaos.
- Today, we’ll walk you through what exactly happened.
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