Stock Idea Meituan: Impact of new guidelines only temporar | FSMOne SG - Research Highlights

Stock Idea

Meituan: Impact of new guidelines only temporary, and are not expected to derail long-term growth

——————————————————

• On 18 Feb, Chinese regulators issued guidelines calling for food delivery platforms to temporarily lower fees for merchants in pandemic affected areas, causing Meituan’s shares to plunge by more than -15%. 

• Meituan has previously lowered fees but on a much larger scale compared to today, but the impact on the company’s revenue was relatively insignificant. 

• All three segments of Meituan beat estimates in 4Q21 and also improved over the previous quarter, a sign that the underlying demand for online services in China remains robust.  

• Valuations remain attractive. Our target price for Meituan is HKD 298. This translates to an upside potential of 78%.

: Read the full article here
: Meituan (HKEX:3690)