Group 1 - The Hong Kong stock market opened higher on May 7, with the China Securities Hong Kong Stock Connect Consumer Theme Index rising over 2%, driven by significant gains in stocks such as Zhongsheng Holdings and Shenzhou International, which both increased by over 6% [1] - The Hong Kong Consumer ETF (159735) also saw a substantial increase, rising by 2.32% with a trading volume nearing 10 million yuan, ranking first among similar products, and a real-time premium rate of 0.23% [1] - The ETF tracks the China Securities Hong Kong Stock Connect Consumer Theme Index, which consists of 50 large-cap, liquid consumer-related stocks within the Hong Kong Stock Connect framework, reflecting the overall performance of consumer stocks [1] Group 2 - According to Shenwan Hongyuan, policies should focus on developing service consumption while maintaining strong growth in goods consumption, emphasizing structural optimization [2] - The National Bureau of Statistics reported that the manufacturing purchasing managers' index (PMI) for April was 49.0%, a decrease of 1.5 percentage points from the previous month, while the non-manufacturing business activity index and composite PMI output index were 50.4% and 50.2%, respectively, indicating continued expansion [2] - Guosen Securities noted that the service sector showed resilience in April, particularly in non-construction services, which countered the downturn in the construction industry, with consumer services demonstrating strong performance [2]

Group 1 - The core viewpoint of the news is the performance of the China Securities Hong Kong Repurchase Index, which reflects the overall performance of high repurchase ratio listed companies in the Hong Kong securities market [1][2] - The China Securities Hong Kong Repurchase Index reported a value of 988.33 points, with a decline of 4.67% over the past month, an increase of 10.27% over the past three months, and a year-to-date increase of 9.35% [1] - The index is composed of 50 listed companies with high repurchase ratios, with a base date of December 28, 2018, and a base point of 1000.0 [1] Group 2 - The top ten weighted companies in the index include HSBC Holdings (10.67%), AIA Group (9.98%), Tencent Holdings (9.96%), Kuaishou-W (8.8%), Meituan-W (8.03%), Dongyue Group (7.32%), Swire Pacific A (6.1%), Hang Seng Bank (6.08%), CSPC Pharmaceutical Group (4.93%), and COSCO Shipping Holdings (4.19%) [1] - The index's holdings are entirely composed of companies listed on the Hong Kong Stock Exchange, with a sector breakdown showing financials at 28.50%, communication services at 18.84%, consumer discretionary at 13.34%, healthcare at 12.96%, materials at 7.54%, real estate at 7.26%, industrials at 6.62%, information technology at 2.55%, consumer staples at 1.37%, energy at 0.86%, and utilities at 0.14% [2] - The index samples are adjusted quarterly, with adjustments occurring on the next trading day after the second Friday of March, June, September, and December each year [2]

Core Viewpoint - The China Securities Hong Kong 300 Leisure Index (H300 Leisure) has shown a decline of 6.48% over the past month, but has increased by 3.86% over the last three months and 1.65% year-to-date [2] Group 1: Index Performance - The H300 Leisure Index is currently reported at 2622.85 points [1] - The index reflects the overall performance of listed companies in various themes such as banking, transportation, resources, infrastructure, logistics, and leisure, selected from the China Securities Hong Kong 300 Index [2] - The index was established on December 31, 2004, with a base point of 1000.0 [2] Group 2: Index Holdings - The top ten weighted companies in the H300 Leisure Index are Tencent Holdings (12.0%), NetEase-S (11.48%), Kuaishou-W (10.64%), Baidu Group-SW (10.57%), Yum China (9.36%), Trip.com Group-S (8.2%), Meituan-W (7.81%), Galaxy Entertainment (5.15%), China Resources Beer (3.1%), and Haidilao (2.79%) [2] - The index's holdings are entirely composed of companies listed on the Hong Kong Stock Exchange, with a 100.00% allocation [2] Group 3: Sector Allocation - The sector allocation of the H300 Leisure Index includes Leisure Services (39.89%), Digital Media (38.67%), Cultural Entertainment (12.69%), Alcohol (7.30%), and Marketing & Advertising (1.45%) [2] Group 4: Index Adjustment - The index samples are adjusted semi-annually, with adjustments implemented on the next trading day following the second Friday of June and December each year [3] - Weight factors are generally fixed until the next scheduled adjustment, with special circumstances allowing for temporary adjustments [3]

Financial Performance - Total revenue for 2023 reached RMB 276.74 billion, representing a 25.7% increase from RMB 219.95 billion in 2022[14] - Gross profit for 2023 was RMB 97.19 billion, up 57.4% from RMB 61.75 billion in 2022[14] - The company reported a profit before tax of RMB 14.02 billion for 2023, a significant recovery from a loss of RMB 6.76 billion in 2022[14] - Net profit for 2023 was RMB 13.86 billion, compared to a loss of RMB 6.69 billion in 2022[14] - The company recorded a profit of RMB 35.8 billion in 2024, representing a year-on-year growth of 158.4%[21] - Adjusted EBITDA and adjusted net profit for 2024 increased to RMB 49.1 billion and RMB 43.8 billion, respectively[21] - Operating profit for 2024 was RMB 36.8 billion with an operating profit margin of 10.9%, compared to RMB 13.4 billion and 4.8% in 2023[79] - The company’s net profit for the year ended December 31, 2024, was RMB 35,808,322 thousand, a significant increase from RMB 13,857,331 thousand in 2023, representing a growth of approximately 158%[91] - Adjusted net profit for the year was RMB 43,772,449 thousand, up from RMB 23,253,418 thousand in the previous year, indicating an increase of about 88%[91] Revenue Growth - The company expects revenue to grow to RMB 337.59 billion in 2024, indicating a projected increase of 22%[14] - The company's revenue for 2024 increased by 22.0% to RMB 337.6 billion from RMB 276.7 billion in 2023[21] - Total revenue for the three months ending December 31, 2024, was RMB 88.5 billion, with a year-on-year increase of 20.1%[18] - Core local business revenue grew by 20.9% to RMB 250.2 billion in 2024, driven by increased transaction volume in delivery services and commissions[70] - New business revenue rose by 25.1% to RMB 87.3 billion in 2024, primarily due to growth in grocery retail operations[70] Operational Efficiency - The total segment operating profit rose by 143.6% from RMB 18.5 billion in 2023 to RMB 45.1 billion in 2024, with a segment operating margin increasing from 6.7% to 13.4%[21] - The core local business segment's operating profit grew by 35.4% from RMB 38.7 billion in 2023 to RMB 52.4 billion in 2024[21] - The operating profit of the core local business segment for Q4 2024 was RMB 12.9 billion, reflecting a significant increase in operational efficiency[22] - The operating profit of the core local business segment increased from RMB 8 billion in Q4 2023 to RMB 12.9 billion in Q4 2024, with an operating profit margin rising by 5.2 percentage points year-on-year to 19.7%[44] Investment and Development - The company plans to invest in new product development and technology enhancements to drive future growth[14] - The company plans to increase investment in cutting-edge technologies such as AI, drone delivery, and autonomous delivery vehicles to drive digital transformation in the retail industry[28] - The company has set a target to expand its market presence in Southeast Asia, aiming for a 30% increase in market share by the end of 2024[3] - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[4] - The company plans to invest $100 million in research and development for innovative technologies in the upcoming year[5] User Engagement and Market Expansion - User data indicates a significant increase in active users, contributing to the overall revenue growth[14] - The company reported a significant increase in user engagement, with a year-over-year growth of 25% in active users[1] - The company is exploring market expansion opportunities in new regions to enhance its market presence[14] - The company has expanded its Keeta service to all major cities in Saudi Arabia, with rapid growth in user base and order volume since its launch in October last year[27] Strategic Acquisitions - Strategic acquisitions are being considered to bolster the company's competitive position in the market[14] - A strategic acquisition is in progress, which is projected to enhance the company's service offerings and increase revenue by 10%[6] Financial Management - The company does not recommend the payment of a final dividend for the year ending December 31, 2024[134] - The company’s board is responsible for determining future dividend payments based on profitability, cash flow, and financial condition[133] - The company held cash and cash equivalents of RMB 70.8 billion and short-term investments of RMB 97.4 billion as of December 31, 2024[21] - The company’s capital-to-debt ratio was approximately 32% as of December 31, 2024, calculated by dividing total borrowings and payables by total equity attributable to shareholders[97] Employee and Governance - The company is implementing a new incentive program for employees, which is expected to boost productivity by 20%[9] - The board of directors has approved a new corporate governance framework to enhance transparency and accountability[10] - The company’s management team includes experienced professionals with backgrounds in finance, strategic planning, and technology development[123][125][127] Research and Development - Research and development expenses were RMB 5.4 billion, with a percentage of revenue decrease from 7.4% to 6.1%[37] - Research and development expenses remained stable at RMB 21.1 billion in 2024, accounting for 6.2% of revenue, down from 7.7% in 2023[74] - The company has a strategic focus on research and development in cutting-edge technologies such as autonomous delivery vehicles and drone delivery[136]

Summary of Key Points Core Viewpoint - The Hong Kong stock market experienced significant net selling from northbound capital, totaling 70.19 billion HKD, with notable net selling in major stocks like Tencent and Alibaba, while Meituan and Sunac China saw net buying [1][2]. Group 1: Northbound Capital Flow - Northbound capital recorded a net selling of 70.19 billion HKD, with 21.59 billion HKD from the Shanghai Stock Connect and 48.61 billion HKD from the Shenzhen Stock Connect [1]. - The stocks with the highest net buying included Meituan (03690), Sunac China (01918), and Chifeng Jilong Gold Mining (06693) [1]. - The stocks with the highest net selling included Tencent (00700), Alibaba (09988), and China Mobile (00941) [1]. Group 2: Individual Stock Performance - Meituan (03690) received a net buying of 7.45 billion HKD, supported by a report from Citigroup indicating no risk of ADR delisting and stable business income [4]. - Sunac China (01918) saw a net buying of 1.69 billion HKD, as the company is actively seeking support for its debt restructuring plan, with significant progress reported [5]. - Chifeng Jilong Gold Mining (06693) achieved a net buying of 221.9 million HKD, reporting a 29.85% increase in revenue and a 141.10% increase in net profit year-on-year [5]. Group 3: Sector-Specific Trends - Semiconductor stocks like Hua Hong Semiconductor (01347) and SMIC (00981) faced net selling of 1.79 billion HKD and 5 billion HKD, respectively, amid changes in import tariffs for certain semiconductor products [6]. - China National Offshore Oil Corporation (00883) experienced a net selling of 2.81 billion HKD, influenced by OPEC+ countries' discussions on increasing production [6]. - China Mobile (00941) had a net selling of 5.09 billion HKD, with a slight revenue growth of 0.02% in Q1, indicating a slowdown in the telecom sector [7].

Investment Rating - The report maintains a "Buy" rating for Meituan-W (03690.HK) [6] Core Views - The company demonstrated robust growth in its core business, with a significant increase in revenue and net profit for 2024, achieving operating revenue of 337.6 billion yuan, a year-on-year increase of 21.94%, and a net profit of 35.81 billion yuan, a year-on-year increase of 158.4% [1] - The core local business showed steady growth, with Q4 2024 revenue reaching 65.57 billion yuan, up 18.9% year-on-year, and operating profit of 12.9 billion yuan, up 60.9% year-on-year, indicating a significant optimization in profit margins [1][3] - New business segments are solidifying market positions and expanding overseas, with Q4 2024 new business revenue reaching 22.92 billion yuan, a year-on-year increase of 23.5%, and a substantial reduction in operating losses [2][3] Summary by Sections Core Local Business - Instant delivery orders and in-store travel orders saw significant growth, with Q4 2024 core local business revenue at 65.57 billion yuan, up 18.9% year-on-year [1] - The company implemented various initiatives to enhance customer demand and support merchants, contributing to the growth in low-tier cities [2] New Business and International Expansion - New business revenue reached 22.92 billion yuan in Q4 2024, with a notable reduction in operating losses from 48.3 billion yuan to 21.8 billion yuan [2] - The international expansion strategy includes launching Keeta in Riyadh, Saudi Arabia, with rapid growth in user base and order volume [2] Financial Performance - The company achieved a gross margin of 37.8% in Q4 2024, an increase of 3.9 percentage points year-on-year, driven by improved margins in grocery retail and operational efficiency [3] - Operating profit for Q4 2024 was 6.7 billion yuan, a year-on-year increase of 280.7%, with core local business profitability significantly contributing to this growth [3] Future Projections - The report forecasts net profits of 42.98 billion yuan, 52.73 billion yuan, and 62.56 billion yuan for 2025, 2026, and 2027 respectively, with adjusted net profits expected to be 51.13 billion yuan, 60.88 billion yuan, and 70.71 billion yuan [4][5]

Summary of Conference Call Company Overview - The conference call pertains to **Meituan**, a leading platform for local services in China, focusing on food delivery, on-demand retail, and various other services. Key Financial Highlights - In 2024, Meituan's total revenue increased by **22% year-over-year** to **RMB 337.6 billion** [1] - The fourth quarter revenue grew by **20.1% year-over-year** to **RMB 88.5 billion** [8] - Adjusted net profit for the fourth quarter reached **RMB 9.8 billion** [8] - The cost of revenue ratio decreased by **3.9 percentage points** to **62.2%** [8] - Total segment operating profit grew to **RMB 10.7 billion**, with an operating margin increase from **4.3% to 12.1%** [8] Business Performance Food Delivery - Daily order volume exceeded **98 million** on a peak day in June 2024 [2] - The transaction frequency of mid to high-frequency users continued to grow year-over-year [9] - The order volume for the **Ping Hao Fan** model reached new highs, redefining affordable catering [3] - The food delivery business has become a significant growth driver for the restaurant sector [2] On-Demand Retail - Meituan InstaShopping expanded product selections significantly, driving consumer demand [2] - The number of Meituan Instamart and its order contribution grew rapidly, especially in lower-tier markets [3] In-Store Business - Order volume increased by over **65% year-over-year** in 2024 [5] - The in-store business achieved robust growth in lower-tier markets, driven by tailored special deals [6] Overseas Expansion - Launched **Kita** in Saudi Arabia, expanding to major cities with rapid user growth [7] - Plans to explore further overseas markets while focusing on food delivery as a primary business [18] Technological Innovations - Meituan is investing in **AI** and autonomous delivery technologies, with a focus on integrating AI into daily operations and product offerings [12][15] - The in-house large-language model, **LoanCat**, is enhancing employee productivity and customer service efficiency [13] Merchant and Courier Support - Launched a **RMB 1 billion** merchant support program to improve service quality and efficiency [4] - Implemented measures to enhance courier rights and benefits, including **RMB 1.4 billion** in occupational injury insurance [4] Strategic Focus - Meituan aims to facilitate industry digital transformation and improve operational efficiency [7] - The company is committed to sustainable development and enhancing the local services ecosystem [7] - Plans to unify the **Shenhuiyuan** program into a broader **Meituan Membership Program** to enhance user benefits [26] Market Outlook - The company anticipates continued growth in both food delivery and on-demand retail, with a target of over **100 million orders per day** [23] - Focus on improving operational efficiency and expanding into new categories while maintaining a strong cash position [19][22] Conclusion - Meituan's strategic initiatives and technological advancements position it well for future growth, with a strong emphasis on enhancing user experience and operational efficiency across its diverse service offerings [27]

Investment Rating - The report maintains a "Buy" rating for Meituan-W with a target price of 178.12 HKD [5][12][15] Core Insights - The overall performance of Meituan in Q4 2024 exceeded expectations, with revenue reaching 885 billion CNY, a year-on-year increase of 20% [9] - The core local business showed resilience, with revenue of 656 billion CNY in Q4 2024, up 19% year-on-year [9] - New business segments, particularly overseas expansion, are seeing positive developments, with new business revenue growing by 24% year-on-year [10] Summary by Sections Delivery Business - In Q4 2024, the delivery orders grew in the high single digits, with average order value (AOV) declining year-on-year but showing a reduced decline quarter-on-quarter [2] - The operational improvements and increased monetization rates helped offset the negative impact of AOV decline on revenue [2] - The macroeconomic environment continues to affect delivery order volumes and AOV, but there are structural opportunities for advertising revenue growth [2] Flash Purchase - Flash purchase orders are estimated to have increased by approximately 25% in Q4 2024, achieving profitability for the year [3] - The convenience of instant retail is stimulating consumer demand, particularly in lower-tier markets [3] - Revenue growth is expected to outpace order growth, contributing significantly to long-term profits [3] In-store and Travel Services - Orders in the in-store and travel segment are projected to grow over 65% year-on-year in 2024, with record highs in annual transaction users and active merchants [4] - The introduction of live streaming and promotional activities is enhancing merchant operations and marketing efficiency [4] - The organizational adjustments and the launch of the Meituan membership system are expected to improve customer acquisition and transaction frequency in this segment [4] Financial Projections - The report forecasts a revenue of 337.6 billion CNY for 2024, with a year-on-year growth of 21.99% [12] - Adjusted net profit for 2024 is projected at 35.8 billion CNY, reflecting a significant year-on-year increase of 158.43% [12] - The estimated earnings per share for 2024 is 5.86 CNY, with a projected increase in subsequent years [12][14]

Investment Rating - The investment rating for Meituan is "Buy" (maintained) with a target price of 178.12 HKD [5][12]. Core Insights - The overall performance of Meituan in Q4 2024 exceeded expectations, with revenue reaching 885 billion CNY, a year-on-year increase of 20% [9]. - The core local business showed resilience, with revenue of 656 billion CNY in Q4 2024, up 19% year-on-year [9]. - New business segments, particularly in overseas markets, are seeing positive developments with a revenue increase of 24% year-on-year [10]. Summary by Sections Delivery Business - In Q4 2024, the delivery orders grew in the high single digits, with an improvement in average order profit year-on-year. The average order value (AOV) decreased year-on-year but the decline was less severe compared to the previous quarter [2]. - The operational efficiency is expected to improve with the trial of social security plans for delivery riders starting in Q2 [2]. Flash Purchase - The flash purchase segment achieved profitability in 2024, with a 25% year-on-year increase in orders. The growth is driven by increased convenience in instant retail and expansion in lower-tier markets [3]. In-store and Travel - The in-store and travel segment saw over 65% year-on-year growth in order volume in 2024, with record highs in annual transaction users and active merchants [4]. - The revenue growth slightly outpaced the gross transaction value (GTV) growth, indicating effective marketing strategies [4]. Financial Projections - Revenue for 2024 is projected at 337.59 billion CNY, with a year-on-year growth of 21.99%. The adjusted net profit is expected to reach 35.81 billion CNY, reflecting a significant recovery from previous losses [12][14]. - The company’s valuation is estimated at 10,882 billion HKD, with specific valuations for different segments: 3.5x PS for delivery, 13.2x PE for in-store and travel, and 0.6x P/GMV for new businesses [15].

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2][6][17] Core Insights - The company has upgraded its membership system, transitioning from a paid membership model to a points-based system, which includes six membership levels: Ordinary, Silver, Gold, Platinum, Black Gold, and Black Diamond [4][7][15] - The new membership system aims to integrate various business segments, providing a comprehensive range of benefits across food, accommodation, travel, entertainment, shopping, and healthcare [3][4][7] - The introduction of the new membership system is expected to enhance consumer spending and frequency of use, thereby accelerating the formation of a local consumption ecosystem [6][17] Summary by Sections Membership System Upgrade - On March 31, 2025, the company fully upgraded its membership system, centering around "Shen Coupons" as core benefits, covering various lifestyle scenarios [3][4] - The new membership system allows users to accumulate growth points through consumption and tasks, with specific spending thresholds to achieve higher membership levels [4][7] Historical Membership Strategy Review - Historically, the company operated independent membership systems for its various services, leading to fragmented user experiences [5][13] - The integration of the membership system began in August 2023 with the merger of "Shen Coupons" and "Shen Membership," which simplified merchant marketing processes and stabilized the core food delivery business [13][14] Financial Projections - The company maintains its adjusted net profit forecasts for 2025-2027 at 51.5 billion, 65.3 billion, and 78.7 billion yuan, corresponding to PE ratios of 14.8, 11.7, and 9.7 times [6][17] - The local lifestyle sector is expected to continue evolving through competitive collaboration, with the upgraded membership system facilitating further synergy among business lines [6][17]