On November 29, Meituan's stock price suddenly crashed**, falling more than 12% in a single day, hitting a new low since April 2020. After many times in the past year, Meituan's stock price has fallen by more than 48% in 2021, and it has fallen by more than 80% from its peak. The latest totalMarket capitalizationOnly HK$566.6 billion remained, evaporating more than HK$520 billion compared to the beginning of the yearMarket capitalization
The trigger for Meituan's stock price is undoubtedly the latest disclosed financial results. According to the disclosed results for the third quarter of 2023, Meituan achieved 764revenue of 700 million yuan, a year-on-year increase of 221%, exceeding market expectations of 76 billion yuan; Net profit reached 35900 million yuan, an increase of 195 percent year-on-year3%, butRing on monthSlide 234%。Adjusted EBITDA was 61900 million yuan, a year-on-year increase of 289%, down from an estimate of 71300 million yuan. In addition, the growth rate of new business also slowed down significantly, with new business revenue in the quarter of 18.8 billion yuan, a year-on-year increase of 152%, the growth rate is not as fast as the core business segment. At the same time, the quarterly loss of new business reached 5.1 billion yuan, which was not obvious compared with the loss reduction in the previous quarter.
Meituan's earnings report was like a depth charge, causing a strong shock in the market. Market funds generally believe that Meituan's core business has limited room for growth, and new businesses are still burning money and bleeding, and there is no return on high growth. What's more serious is that in the long-term competition with platforms such as Douyin, Meituan's core local business will face a huge impact, and the pressure on profitability will continue to increase. This means that Meituan is facing a major test from the inside out.
1, Douyin attacked, Meituan burned money
On the whole, Meituan's financial report shows that the core fundamentals, including takeaways, are still relatively stable, but the future imagination space is already very limited. What the market is most concerned about is, in the face of Douyin's onslaught, can Meituan hold on to its core fundamentals? According to the financial report, in the third quarter, Meituan's unit price declined, resulting in a slightly slower revenue growth rate than the growth rate of single volume. This is mainly due to the increase in cash burning and subsidies, as well as the increase in the proportion of orders for low-priced takeaway products "Pinhaofan". Launched on Douyin** BattleMacro environmentWeakening the background, more and more users are loweredConsumption level, moving to lower-priced products. As a result, Meituan has had to vigorously promote low-cost takeaway products by burning money and subsidies"Fight the rice"。At the same time,"Value for money"It has also become one of the frequently mentioned words in financial reports. At the moment, the market is worried that it is weakMacro environmentWill it affect the growth rate of the food delivery business in the medium to long term? Once the various subsidies and discounts are removed, Meituan's order volume may drop significantly.
2. Douyin's local life business intensifies competition
Local life O2O is essentially oneLabor-intensivebusiness, which means at any profitableBusinessIn the field, there will always be new competitors to challenge the original market hegemon. Douyin is one of the most ferocious contenders and is making a big push into the local lifestyle sector. Starting in the third quarter of 2022, Douyin's local life business exploded, and by the Spring Festival in 2023, its share of Meituan's write-off value (GTV) once reached about 40%. Among them, the catering industry is the main battlefield between Meituan and Douyin. In the face of Douyin's onslaught, Meituan has begun to fight back in an all-out way since the second quarter of this year, adopting strategies such as reducing annual fees and renegotiating commission rates. However, Meituan's counterattack inevitably cost a lot of profits. According to the financial report, in the third quarter, Meituan's localBusinessThe profit margin is 178%, down 4 percentage points from the previous quarter, localBusinessLower profit margins partially offset food and beverage takeawaysOperating profitgrowth. But Douyin's offensive against local lifestyle businesses is still intensifying. In mid-November, Douyin's management underwent a major reshuffle, and the local life business has become an important growth engine for Douyin, which means that Douyin will continue to invest heavily in the competition in the local life field.
3. The growth rate of new business slowed down and losses increased
According to the financial report data, the growth rate of Meituan's new business has slowed down, and the growth rate is not as fast as that of the core business segment. Quarterly revenue from new business was RMB18.8 billion, up 15% year-on-year2%, but the loss reached 5.1 billion yuan, which is not obvious compared with the loss reduction in the previous quarter. The new business includes e-commerce, internationalization, fresh food, automobiles, etc. New business will still require a lot of capital investment in the coming period, but at present, new business has not yet brought high growth returns. At the same time, new business areas are also facing fierce competition, such as the e-commerce sector, which requires a large amount of capital investment, and the fresh food sector, which involves high-cost links such as cold chain logistics.
Although Meituan is facing many challenges, the market also believes that Meituan's stock price may be overcorrected. On the one hand, Meituan's core business is still growing steadily, especially the food delivery business has a high coverage rate in cities and good user stickiness. On the other hand, Meituan has a large user base and data advantages, and can improve the efficiency and profitability of its core business through data-driven and technological innovation. In addition, Meituan can also strengthen the layout of the ecological chain and improve its overall competitiveness by integrating and optimizing resources. However, in the face of emerging competitors such as Douyin, Meituan needs to strengthen the innovation and upgrading of its core business, as well as quickly promote the development of new businesses, in order to maintain its competitive advantage in the competition.