Hua Er Jie Jian Wen·2025-05-30 10:01Core Viewpoint - Meituan's latest quarterly report exceeded expectations, with total revenue reaching 86.6 billion RMB, a year-on-year increase of 18.1%, and net profit soaring to 10.06 billion RMB, up 87% year-on-year. However, the market reacted negatively due to CEO Wang Xing's strong statement about winning competition "at all costs," leading to a lack of guidance for Q2 and the rest of the year [1][2][18]. Financial Performance - Total revenue for the quarter was 86.557 billion RMB, representing a year-on-year growth of 18.1% [2]. - Operating profit margin increased significantly from 7.1% in the same period last year to 12.2% [1][2]. - Net profit for the quarter was 10.056 billion RMB, reflecting an 87.3% year-on-year increase [2]. - Adjusted EBITDA reached 12.302 billion RMB, a 52.4% increase compared to the previous year [2]. Business Strategy - Meituan's food delivery business has transitioned from loss to profitability, with a remarkable operating profit margin of 17.4% as of 2024, according to JP Morgan's report [4][7]. - The strategic value of the food delivery business is immense, as it helps bind user demand and provides significant cash flow, with cash and cash equivalents totaling 115 billion RMB and short-term investments at 65.4 billion RMB [8][10]. - The food delivery business also supports the rapid expansion of Meituan's "instant retail" segment, with a 50% year-on-year increase in orders [10]. Competitive Landscape - Meituan faces competition from JD.com and other platforms, which may challenge its market share and pricing power [18]. - The company emphasizes the importance of maintaining user engagement and market dominance, even if it means sacrificing short-term profits [14][15]. - The strategic approach of "spending at all costs" is seen as a tactical move to deter competitors and maintain market leadership [18].