$MEITUAN-W (03690.HK)$ Q3 performance once again exceeded expectations. Net profit turned positive, meaning the forward P/E ratio is no longer negative. Revenue reached 62.6 billion yuan, representing a year-on-year increase of 28.2% from last year; net profit was 1.22 billion yuan, compared to a loss of 9.99 billion yuan in the same period last year; operating profit increased by 124.6% year-on-year to 9.3 billion yuan, and the operating margin improved to 20.1%.
Revenue from the core local commerce segment grew by 24.6% from 37.2 billion yuan in Q3 2021 to 46.3 billion yuan in the same period in 2022. Revenue from the new business segment increased by 39.7% from 11.7 billion yuan in Q3 2021 to 16.3 billion yuan in the same period in 2022, mainly due to the expansion of the goods retail business.
The total order volume for food delivery and Meituan Flash Purchase businesses increased by 16.2% year-on-year, with the highest single-day order volume surpassing 60 million orders at the beginning of August.
Personally, I highly commend this earnings report. In Q3, Meituan’s core local commerce segment generated an operating profit of 9.3 billion yuan, compared to 4.1 billion yuan in the same period in 2021, which represents an increase of approximately 5.2 billion yuan! Meanwhile, the new business segment incurred an operating loss of 6.77 billion yuan, compared to -10 billion yuan in the same period in 2021, reflecting a reduction in losses of 3.22 billion yuan! Combined, this amounts to an improvement of 8.44 billion yuan! Moreover, it’s important to note that Q3 2022 was actually more challenging than the same period last year due to pandemic-related lockdowns in mainland China. Therefore, these results are actually very impressive.
Additionally, some people may not understand why Meituan’s profits are relatively low while its valuation remains high...