CICC: Raises Meituan's target price to HKD 136, Raises net profit forecast for this year and next year

CICC's research report pointed out that Meituan's performance is resilient, industry competition is easing, and second-quarter revenue increased by 21% year-on-year, surpassing the bank's and market expectations. The bank now expects Meituan's revenue and adjusted operating profit growth to be better than previously expected this year, with core local business revenue expected to increase by 20% year-on-year. This growth is mainly driven by the increase in advertising investment in food delivery and flash sales businesses, while the total volume of in-store product transactions is expected to maintain a 35% year-on-year growth, driven by commissions and merchant advertising. The bank expects this year's adjusted operating profit to exceed 40 billion yuan, with core local business adjusted operating profit expected to increase by 23% year-on-year to 48.5 billion yuan. CICC raised its net profit forecast for the company for the next two years by 7.5% and 2% respectively, expecting net profit to increase by 70% and 20% year-on-year for each year. The target price was raised from HKD 129 to HKD 136, maintaining a "buy" rating