On November 29, Meituan's stock price crashed**, falling more than 12% in a single day. Subsequently, the share price reached HK$88 again, reaching a new low since April 2020. As of the latest**, Meituan's share price is trading at 906 Hong Kong dollars, the cumulative decline has exceeded 48% during the year. Compared with the highest point in 2021, the cumulative decline is as high as 80%. And Meituan's totalMarket capitalizationThere are only 566.6 billion Hong Kong dollars left, and more than 520 billion Hong Kong dollars have evaporated during the yearMarket capitalization。The main reason for Meituan's share price is the latest financial results. In the announced results for the third quarter of 2023, it shows that Meituan's revenue reached 764700 million yuan, a year-on-year increase of 221%, higher than market expectations. However, among the netProfitsfor 35900 million yuan, a year-on-year increase of 1953%, butRing on monthSlipped 234%。and before adjusted interest, taxes, depreciation and amortizationProfitsfor 61900 million yuan, a year-on-year increase of 289%, but lower than the estimate of 71300 million yuan. In addition, Meituan's new business growth slowed sharply, with revenue growth of only 15 percent year-on-year2%, with a loss of up to 5.1 billion yuan. This financial report can be said to be like a "depth charge", which directly triggered the ** of the stock price.
The market is most worried about Douyin's competition with Meituan. Recently, Douyin has begun to vigorously attack the local life field, with a special focus on the development of the catering field. Since the third quarter of 2022, Douyin's local life business has exploded, and during the Spring Festival in 2023, it will account for about 40% of Meituan's write-off amount. In the face of Douyin's onslaught, Meituan began to fight back in an all-out way, reducing annual fees, renegotiating commission rates and other strategies, but this undoubtedly sacrificed a lotProfits。In addition, Meituan's earnings report showed that the average customer value of customers has declined, which has led to a slowdown in revenue growth, mainly due to the increase in subsidies and the increase in "pinhaofan" (low-cost takeaways). With the rise of Douyin** BattlewithMacro environmentConsumers are increasingly inclined to downgrade their consumption and move to lower-priced products. This made Meituan have to burn money and sacrificeProfitsto expand the low-cost takeaway business "Spell Good Rice". In the long-term competition, Meituan's local business will face huge impact and profitability pressure.
According to the financial report, Meituan's new business (such as Meituan Preferred, Meituan Grocery Shopping, Kuaidun, Bicycle Sharing, Power Bank, etc.) revenue was 18.8 billion yuan, a year-on-year increase of 153%, but still a loss of 5.1 billion yuan, with a loss rate of 272%。Although the loss of new business has narrowed, there is still a significant drag on overall profitability. The loss of new business was mainly due to high fulfillment costs and fresh foodAttrition rateHigh. Although Meituan's management said that new business is growing, the pace of growth has slowed slightly, and new strategies have been developed to improve operations, butInvestmentsis still on the new businessProfitsGrowth holds a high degree of uncertainty.
To sum up, Meituan faces multiple challenges. On the one hand, Douyin's onslaught and limited room for growth in its core business will put pressure on its profitability, especially as competition intensifies and consumption downgrades. On the other hand, the loss of new business is still large, and the future growth is uncertain. As a result, the market is full of concerns about Meituan's prospects, and the stock price continues**. Although Meituan's management said that it was considering a buyback program to boost its share price, the market did not buy it. For Meituan, the competition will be more fierce in the future, and it will need to increase innovation and optimize its business model to meet the challenges.