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<Research>G Sachs Trims MEITUAN-W's TP to HKD172 on Intensified Competition
Recommend 35 Positive 51 Negative 26 |
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Goldman Sachs has issued a report predicting that the market would have a mixed reaction to MEITUAN-W's (03690.HK) better-than-expected 1Q25 results. While MEITUAN-W's core local commerce profits in 1Q initially exceeded expectations, the competitive landscape in food delivery will intensify starting from 2Q, resulting in increased delivery subsidies (especially for MEITUAN-W since May) that will have a significant short-term impact on profits from the company's food delivery business. In addition, Goldman Sachs acknowledged in the report that the industry landscape will become more fragmented in the medium term with JD-SW (09618.HK)'s commitment to its food delivery business. Accordingly, the broker lowered its target for MEITUAN-W's average normalized food delivery gross transaction margin for 2025-27 to 2.5% from 3.2%, reflecting the slightly heightened competition. Goldman Sachs kept a Buy rating on MEITUAN-W but axed its target price from HKD200 to HKD172, considering that the company's potential for profit recovery starting from FY26 as the heavy subsidies from BABA-W (09988.HK) and JD-SW are expected to gradually normalize in 2H25. AAStocks Financial News |
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