Production | Tiger Sniff Research
Author | Ding Ping

On March 30, Meituan Comment released the full-year and fourth-quarter financial reports for 2019: the total revenue for the full year of 2019 was 97.53 billion yuan, a year-on-year increase of 49.5%; the operating profit was 2.68 billion yuan, and the same period in 2018 was a loss 11.09 billion yuan. In the fourth quarter of 2019, it realized revenue of 28.16 billion yuan, an increase of 42.2% year-on-year; operating profit of 1.42 billion yuan, and a loss of 3.74 billion yuan in the same period in 2018.

Core highlights this quarter:

  1. New business income is gradually approaching the restaurant and wine travel business, which is expected to become the second largest revenue source;

  2. Quarterly GMV is down from the previous quarter due to seasonal effects, but the ability to realize cash has improved;

  3. Meituan achieved profit for three consecutive quarters, and achieved overall profit in 2019;

  4. Affected by the epidemic, the short-term performance of the US Mission is under pressure.

    I. What is the traffic acquisition capability of Meituan?

    The number of active merchants has picked up, and the number of transaction users has accelerated.

    Since 2018Q4, the number of active merchants in the Meituan Group has stabilized, and the growth in Q1 and Q3 2019 has been stagnant. 2019Q4 achieved 6.2 million, an increase of 300,000 from the previous month, which has picked up. (Note: The number of active merchants in Q4 2019 refers to the number of merchants in the 12 months ending in Q4 2019)

    Data source: company announcement

    Meituan platform has a strong network effect, and the growth of merchant users has picked up, which will inevitably drive the growth of transaction users.

    Meituan’s 2018Q2 annual transaction user growth rate reached a new high, reaching 9.55%, mainly because Meituan acquired 100% equity of Mobike in April 2018, and new users of Mobike drove an increase in active users.

    But since the first quarter of 2018, the annual growth rate of Meituan’s annual transaction users has entered a continuous decline. It was 450.5 million in 2019Q4, which was only 3.37% from the previous quarter. (Note: The number of transaction users in 2019Q4 refers to the number of transaction users in the 12 months ending in 2019Q4)

    Data source: company announcement

    Second, what is the source of income for Meituan?

    The revenue share of the new business segmented into the restaurant and wine tourism is expected to become the second largest revenue source of the US Mission.

    Meituan’s income is mainly composed of visits to restaurants, restaurants, food delivery, and new businesses. Among them, the new business mainly includes bike sharing,