Meituan Dianping Class B (3690 HK)

1Q21: Solid Results; A Mix Of Joy And Regulatory Uncertainties Moving Forward
1Q21 results are within expectations. Total revenue grew 121% yoy to Rmb37b, in line with consensus estimates. MTDP delivered adjusted operating loss and non-GAAP net loss of Rmb4.2b/Rmb2.9b respectively as a result of widened losses from its NIO segment and higher S&M spending, slightly above street estimates. Management expects the NIO segment’s operating loss to widen due to heavy investment in expanding its supply chain. We maintain BUY with a lower target price of HK$365.00.