[ET Net News Agency, 21 October 2019] Morgan Stanley raised its target price for
Meituan Dianping (03690) to HK$105 from HK$78 and maintained its "overweight" rating.
The research house raised its 3Q revenue forecast 2% to Rmb25.9bn, mainly reflecting
upside from food delivery orders. Morgan also expects a better net profit margin on better
food delivery margins. It expects 3Q adjusted net profit of Rmb0.1bn versus Rmb1.3bn net
loss in its prior forecast thanks to strength in food delivery and ongoing cost synergies
in new initiatives.
It expects 2019 full-year food delivery adjusted operating profit to reach break-even
despite a likely loss in 4Q amid seasonally unfavorable cost structure. It believes the
better-than-expected margin performance this year is manifested by Meituan's leadership in
food delivery. (KL)