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Retail + Technology to drive future growth

■ Meituan reported 3Q21 revenue of Rmb48.8bn, up 38% yoy, and an adjusted net loss of Rmb5.5bn, compared to net profit in 3Q20, in line with our expectations.
■ We expect revenue for food delivery, in-store, hotel and travel, and new initiatives to grow by 19.3%, 23.5%, and 45.9% yoy, respectively, and OPM to be 5.7%, 39.8%, and -85.5% in 4Q21F. Meituan changed its strategy from “Food + Platform” to “Retail + Technology” in Sep, reflecting its determination to penetrate China’s retail market.
■ Reiterate Add with a DCF-based TP of HK$300.

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