Morgan Stanley: Optimistic about Meituan's core profitability, with a target price of HKD 120

Morgan Stanley's report stated that considering the improvement in the economic benefits of food delivery units and the stable competition leading to a rebound in in-store profits, they hold a relatively optimistic view on Meituan's core profitability. They maintain a "market perform" rating with a target price of HKD 120. Morgan Stanley expects Meituan's second-quarter local core business revenue to be RMB 60.5 billion, an 18% year-on-year increase; operating profit to be RMB 12.8 billion, a 15% year-on-year increase. Due to the continuous narrowing of losses in new businesses, total revenue is expected to be RMB 81.3 billion, a 19.7% year-on-year increase, with non-IFRS operating profit of RMB 10.8 billion