[ET Net News Agency, 13 July 2020] UBS Global Research raised its target price for
Meituan Dianping (03690) to HK$240 from HK$160 and maintained its "buy" rating.
The research house sees Rmb1.0 of operating profit per 1P food order (where Meituan is
responsible for delivery) by 2022, up from Rmb0.8 previously, based on its recent survey.
UBS said its analysis suggests that key food delivery metrics still have room to
improve, and Meituan's relative positioning versus Ele.me remains strong, with 56% of
respondents saying Meituan is their most often used platform versus 29% for Ele.me.
Therefore, UBS sees further upside in Meituan's food delivery profits to Rmb1.5 per
order in the base case and Rmb2+ in the upside case over time due to high operating
leverage in the 1P model. (KL)