Focus on the trillions of troubles: whats the next move?

category:Finance
 Focus on the trillions of troubles: whats the next move?


What did meituan go through from profit to loss to market value exceeding trillion?

In the near future, the market continues to pursue and value meituan, which is based on the long-term value data that meituans Q1 financial statements exceed expectations in 2020. During the epidemic period, meituans food and beverage takeout faced severe challenges, and its Q1 takeout revenue decreased by 11.4% to 9.5 billion yuan year on year. The average daily order volume decreased by 18.2% to 15.1 million. However, during Q1, the average value of each order of meituan takeout increased by 14.4% year on year.

In the groups Q1 financial report conference call in 2020, Goldman Sachs analysts asked: in the longer term, what structural changes will the epidemic bring? Wang Xing replied that on the demand side, more consumers are aware of the convenience of the delivery platform. At the same time, consumers will tend to accept more diversified scenes of takeout, not only fast food, but also very formal dinner. The epidemic has made consumers willing to pay for higher quality goods and place high orders.

On the other side, in March 10th, Alipay partner CEO Hu Xiaoming announced that Alipay was officially upgraded to an open digital life platform. This means that Ali further promotes the integration of local life, the introduction of hunger + word of mouth + Alipay combination, overweight sniper beauty Corps.

However, in the short term, Ali is still hard to shake the leading position of meituan in food and beverage takeout. In the local life market, Ali and meituan always maintain a share ratio of 1:2. This also proves the anti Strike ability of the main base plate of the US regiment.

On June 17, HSBC Global Research released a report, reiterating its rating of meituan as buy. The target price was raised from HK $153 to HK $206. This means that HSBC Global believes that the market value of meituan will reach HK $1.2 trillion this year.

The hidden danger of meituan

There are opportunities, but the hidden dangers and weaknesses of meituan are also obvious.

According to the meituan financial report, there are three major segments of revenue: Catering takeout, arrival / wine tour, new business and others. The following also takes this as the logical analysis sequence.

Although meituan started with group buying, the food and beverage take out business currently dominates the market. This business brings high-frequency and large-scale flow to meituan, which is the moat of meituan. However, long before the outbreak, the sluggish growth of annual transaction users of meituan was a matter of certainty.

In the four quarters of 2018, the growth rate of transaction users of meituan was 5.27%, 9.55%, 7.12% and 4.73% respectively. In the four quarters to 2019, the growth rate of users has declined to 2.85%, 2.62%, 3.12% and 3.37%. However, the outbreak turned meituan into a crisis and reduced the number of users going out, which led to a 8.9% increase in the user growth rate of meituan Q1 in 2020, and the number of trading users reached 448.6 million.

Another key indicator is that the annual growth rate of active businesses in meituan is also slowing down significantly. From the growth rate of 2.27%, 13.3%, 7.84% and 5.45% in the four quarters of 2018, to the year-on-year growth rate of 0%, 1.72%, 0% and 5.08% in the four quarters of 2019, to the year-on-year growth rate of 5% in Q1 in 2020, the number of active businesses is 6.1 million.

Wang Xing said in the Q1 teleconference in 2020 that despite the short-term setbacks caused by the epidemic, meituan will continue to achieve the goal of 100 million orders per day and 1 yuan operating profit per order in the long term by 2025.

What is the concept of 1 yuan profit per order? At the time of this years meituan maid drawing incident, Wang Puzhong, senior vice president and head of meituan takeout, once revealed that meituan takeout made less than 20 cents per order in the fourth quarter of last year. If calculated by the 8.72 billion orders that meituan took out last year, the profit last year would be less than 1.8 billion yuan. It is not easy for meituan to achieve the annual profit target of 36.5 billion in five years.

Compared with food and beverage takeout, the real cash cow of meituan is in the store / wine tour business. In 2019, the business contributed 19.75 billion yuan of gross profit, with a gross profit margin of 88.6%.

But it is such a cash cow. A black swan event and the new crown epidemic make it seriously frustrated in the groups Q1 financial report in 2020. Not only in February this year, there are basically no orders, but also the industry recovery in the future is not optimistic. Chen Shaohui, CFO of meituan, is conservative about the recovery of hotel business throughout the year. He expects orders and revenue growth of wine tours to continue to be negative in Q2, even in 2020.

In new business and other aspects, sharing bicycles and online car Hailing continued to lose money. Although food and beverage management and retail have improved, compared with HEMA fresh and super species, they have not fully demonstrated combat effectiveness.

In addition, meituan has another potential problem that needs to be solved.

The operation ability of meituan is strong, but the ability of continuous investment in scientific research and innovation is lacking. At the end of March this year, meituan public cloud announced that it would end its five-year operation, as an example.

According to the comparison of meituans investment in R & D in 2018 and 2019, it can be found that:

The R & D expenditure of meituan in 2017 was RMB 1.1 billion, increased to RMB 2 billion for the three months ended December 31, 2018, and the percentage of revenue decreased by 10.0% from 11.0%.

In 2018, the R & D expenditure of meituan increased from 2 billion yuan in the same period to 2.2 billion yuan in the third quarter of 2019, accounting for 8.0% of revenue from 10.0%.

It can be seen that in recent years, the percentage of R & D expenses in revenue of meituan has declined again and again. As an Internet company, the percentage of R & D expenses has declined instead of rising, which may foreshadow the future risks.

Back to the three major revenue segments of meituan. In general, before the outbreak, the key indicators of meituans merchants and users were already in a weak state. After the outbreak, the business of cash cattle liquor brigade was seriously frustrated, and the innovative business has not yet formed a scale combat effectiveness.

After several months of economic halting in the first half of this year, the cost and sequelae of economic downturn may gradually emerge in the second half of this year, which is still a bigger challenge for meituan based on service.

Meituans next move

Meituan is looking for a third traffic and revenue battleground outside the takeout and wine brigades.

In the innovative business of meituan, the flash purchase business, which focuses on local retail and 30 minute delivery to the door, is becoming an important business of meituan. The Q1 financial report of meituan in 2020 shows that the revenue of flash purchase business is 4.17 billion yuan, up 4.9% month on month, which is the only business segment of meituan.

According to teach, at the beginning of this year, meituans flash purchase division pulled out a team that called Daquan. At present, meituan flash purchase business mainly focuses on C-end, with about 200 million products, covering fruit, 3C, mother and baby, pet shop, beauty shop and other categories.

Flash purchase business is closely related to takeout business of meituan. Liu Shuai, the head of meituan flash purchase, once said in an interview that there are fixed time points for food and beverage takeout, such as breakfast, lunch and dinner. Our non food and beverage delivery time is scattered, not so fixed, and the existing transportation capacity is enough to meet the needs of food and flash purchase at the same time. This is equivalent to copying the take out capacity in spare time to flash purchase business.

On the other hand, the emergence of the epidemic has also accelerated the competition in the emerging market of local retail.

From local life to city retail, meituan and Ali are bound to have a fierce battle. In front of meituan, in addition to stabilizing the basic plate, there is also the burden of constantly opening up new traffic entrances. For emerging businesses, throughout the development history of meituan, Wang Xing is good at following the strategy and staying behind through operation - early group buying vs. American Groupon, take out vs. hungry, where to carry Cheng. Operation is always the strength of meituan. Although meituan is sought after by the market, it has many hidden dangers. In dynamic competition, Alibaba, the main competitor of meituan, has been besieged by pinduoduo and Jingdong recently. Maybe this is a good time for meituan to vigorously develop flash purchase business. How to add a security defense mechanism for the uncertainty in the second half of the year is a top priority for the US regiment. Source: Wang Wenhua, editor in charge of science and technology innovation board daily_ NF5982

From local life to city retail, meituan and Ali are bound to have a fierce battle. In front of meituan, in addition to stabilizing the basic plate, there is also the burden of constantly opening up new traffic entrances.

Although meituan is sought after by the market, it has many hidden dangers. In dynamic competition, Alibaba, the main competitor of meituan, has been besieged by pinduoduo and Jingdong recently. Maybe this is a good time for meituan to vigorously develop flash purchase business. How to add a security defense mechanism for the uncertainty in the second half of the year is a top priority for the US regiment.