2Q21: Solid Core Business Performance; To Empower The Spirit Of “Common

Meituan reported solid 2Q21 results. Total revenue grew 77% yoy to Rmb43.8b, 3-4% higher than our and consensus estimates. The company delivered adjusted operating loss and adjusted net loss of Rmb3.1b/Rmb2.2b respectively as a result of widened losses from its NIO segment as well as higher S&M spending. Management guided that the SAMR investigations are still ongoing and it remains uncertain on the timing and amount of the fines. We maintain HOLD with a higher target price of HK$242.00.