Citi: MEITUAN-W (03690) Q3 results expected to be broadly in line; maintain "Buy" rating and HK$120 target price

Citi issued a research report stating that MEITUAN-W (03690) is expected to announce its third-quarter results in late November, with overall figures likely to be broadly in line with the bank's and market expectations. The bank maintains its earnings forecasts for the company, reiterates its "Buy" rating, and keeps its target price at HK$120. The bank expects Meituan's third-quarter total revenue to be RMB114.2 billion (same unit below), up 20% year-on-year; adjusted net profit to be RMB2.56 billion. Market expectations for total revenue and adjusted net profit are RMB113.3 billion and RMB2.2 billion, respectively. The bank expects Meituan's third-quarter core local commerce revenue to grow about 15% year-on-year to RMB77.3 billion, with operating profit of RMB4.15 billion. The food delivery business operating margin is expected to be 1.1%, with per-order economics of RMB0.08. Looking ahead to the fourth quarter, the bank expects seasonal factors and colder weather may push up rider costs, but Meituan's continued cost control and operational efficiency should support sequential improvement in per-order economics. The bank expects the in-store business operating margin to remain broadly stable.