In major news on Hong Kong stocks, Meituan Dianping (HK:3690) reported a 25% year-over-year surge in Q1 revenues to ¥73.3 billion, exceeding analysts’ expectations of ¥70.3 billion. Profit during the quarter increased to ¥5.4 billion, marking a 60% increase from the previous year. Meituan shares are traded down over 2% on Friday, after gaining some traction in early trading hours.
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Meituan is a premier e-commerce platform that provides a wide range of products and services, including food delivery, entertainment, and travel.
Meituan’s On-Demand Delivery Boosts Q1 Performance
In Q1, Meituan’s Core Local Commerce segment revenue rose by 27.4% year-over-year to ¥54.6 billion. The segment’s operating profit grew by 2.7%, with an operating margin of 17.8%. This segment includes on-demand food and grocery deliveries, travel bookings, and merchant marketing services.
The company’s on-demand delivery business recorded robust growth, with delivery transactions increasing by 28.1% year-over-year to 5.5 million. This was mainly driven by enabling merchants to operate online and providing consumers with more cost-effective options.
In the company’s New Initiatives segment, operating losses decreased by 45.2% to ¥2.8 billion compared to Q1 2023. This was attributed to Meituan Select, which drove higher operational efficiency for the segment.
Analysts’ Reactions
Post-results, Citi confirmed its Buy rating on Meituan stock, while raising the price target from HK$134 to HK$140. The broker praised the company’s efforts to adapt to changing consumer preferences. Citi believes the company’s deeper penetration into lower-tier cities, along with a wider product range, will further enhance Meituan Select.
DBS analyst Tsz Wang also reiterated a Buy rating and predicted 23.4% upside for the share price.
Is Meituan a Good Stock to Buy?
On TipRanks, 3690 stock has received a Strong Buy rating from analysts based on 13 Buys, one Hold, and one Sell recommendation. The Meituan share price target is HK$133.60, which shows a growth rate of 18.5% on the current trading price.
