[ET Net News Agency, 23 October 2019] J.P. Morgan raised its target price for Meituan
Dianping (03690) to HK$110 from HK$85 and maintained its "overweight" rating.
The research house turned more positive on Meituan's profit outlook, expecting the food
delivery business, as well as the overall bottom-line, to remain profitable into 3Q,
thanks to milder-than-expected competition and better operating efficiency.
JPM thinks Ele.me's competition strategies now focus on leveraging the synergies within
Alibaba Group's digital economy, suggesting less margin pressure from subsidies in 2H and
2020.
Meituan's share price has moved up over 30% since the 2Q result but JPM believes the
better profit outlook is not fully in the share price. (KL)