[Earnings Report Analysis] Meituan-W Earnings Report Analysis and Interpretation

Meituan-W (Stock Code:$MEITUAN(3690.HK)) released its financial report for the second quarter and first half of 2024. This report once again demonstrated Meituan's strong growth momentum as a giant in local life services and the deep potential of its diversified business layout.

1. Steady Revenue Growth, Core Business Performs Well
Revenue Overview

In the second quarter of 2024, Meituan achieved total revenue of 82.25 billion yuan, a year-on-year increase of 21%, not only surpassing market expectations of 80.42 billion yuan but also further consolidating its leading position in China's local life services market. This growth was mainly driven by the steady growth of core local commerce, with segment revenue reaching 60.7 billion yuan, a year-on-year increase of 18.5%, demonstrating Meituan's continued competitiveness in core businesses such as food delivery and in-store travel.

Business Segment Analysis
Delivery Services: Revenue reached 23.021 billion yuan, a year-on-year increase of 13%, reflecting Meituan's efforts to improve delivery efficiency and optimize user experience.
Commission Income: Reached 22.825 billion yuan, a year-on-year increase of 20.7%, indicating increased reliance of merchants on Meituan's platform and continued expansion of platform transaction scale.
Online Marketing Services: Revenue was 12.36 billion yuan, a year-on-year increase of 19.9%, reflecting Meituan's growing ability to help merchants increase brand exposure and promote sales conversion.
Other Services and Sales: Including interest income, revenue reached 24.045 billion yuan, a year-on-year increase of 30.9%, demonstrating initial success in Meituan's exploration of finance, new retail, and other fields.

2. Significant Improvement in Profitability

Meituan achieved a leap in profitability, with adjusted net profit reaching 13.606 billion yuan, a year-on-year increase of 77.6%, far exceeding market expectations of 10.34 billion yuan. Net profit reached 11.352 billion yuan, a year-on-year increase of 142.1%, showing significant optimization in cost control and operational efficiency. In particular, the operating profit margin of core local commerce increased to 25.1%, up 3.3 percentage points year-on-year, reflecting Meituan's firm determination and effective execution in improving profit quality.

3. Accelerated Growth of New Businesses, Significant Reduction in Losses

Revenue from Meituan's new business segment increased by 28.7% year-on-year to 21.6 billion yuan, showing the company's active attitude and significant results in expanding new business areas. At the same time, the operating loss of the new business segment narrowed by 74.7% year-on-year to 1.3 billion yuan, and the operating loss rate improved by 8.7 percentage points quarter-on-quarter to 6.1%. This not only reflects Meituan's cost control capabilities in exploring new businesses but also serves as strong evidence of the gradual maturity of its business model and enhanced profitability.

4. Dual Drivers of Instant Delivery and Flash Purchase Businesses, In-Store Travel Reaches New Highs

Instant delivery business continued to grow steadily, with the number of transactions reaching 6.167 billion, a year-on-year increase of 14.2%, demonstrating Meituan's deep accumulation and market competitiveness in the logistics and delivery field. The flash purchase business achieved continuous growth in transaction users and order frequency, further expanding Meituan's service boundaries. In addition, the in-store travel business performed particularly well in the second quarter, with order volume increasing by more than 60% year-on-year, and the number of annual transaction users and active merchants both reaching record highs, laying a solid foundation for Meituan's long-term development.

5. Conclusion and Outlook

In summary, Meituan-W (03690.HK) delivered an impressive report card in the second quarter of 2024, showing strong development momentum and huge market potential in terms of revenue growth, profitability improvement, and new business expansion. Based on this, we are optimistic about Meituan's future development.

Short-Term Bullish

In the short term, with the continued recovery of the consumer market and the increasing reliance of consumers on online services, Meituan's core business is expected to maintain steady growth. At the same time, the accelerated growth and reduced losses of the new business segment will contribute more growth points to the company's overall performance.

Long-Term Bullish

In the long term, Meituan's leading position in the local life services market is unshakable. Its diversified business layout and strong technological innovation capabilities will bring broader development space to the company. With the deepening of digital transformation and the continuous upgrading of consumer demand, Meituan is expected to continue leading industry changes and achieve even more brilliant performance.

Therefore, we maintain a long-term bullish attitude towards the investment prospects of Meituan-W (03690.HK) and recommend that investors pay close attention to the company's dynamics and seize investment opportunities.$MEITUAN(03690.HK) 

Disclaimer: The views expressed in this article are personal and do not constitute investment advice. Investors should evaluate risks independently and seek professional advice when making investment decisions. The market is risky, and investment should be cautious.