Ge Long Hui·2025-06-26 03:05Company Overview - Meituan is scaling back its community group buying business, Meituan Youxuan, and will focus more on the development of instant retail business [1] - The company has reported the closure of operations in certain regions, retaining only key areas such as Guangdong and Hangzhou, with a faster-than-expected contraction [1] - Since 2020, the company has invested over 80 billion yuan in this business, which will no longer be responsible for the retail strategy [1] Business Strategy - The company is prioritizing Meituan Flash Purchase and Xiaoxiang Supermarket, planning to expand product categories and increase the number of stores and flash warehouses [1] - Xiaoxiang Supermarket's coverage will gradually extend to all first- and second-tier cities, while the company emphasizes maintaining an active pace in overseas expansion [1] Financial Outlook - New business losses are expected to peak in 2025, which is seen as a positive impact on valuation [1] - The company anticipates that Meituan Youxuan could release an additional loss reduction of 2-3 billion yuan over the next two years, contributing to a narrowing of losses [2] - Despite maintaining profit forecasts, the company acknowledges the intense competition in the takeaway and flash purchase markets, which remains unpredictable [2] Valuation and Ratings - The company maintains its profit forecast and rating of outperforming the industry, with a target price of 177 HKD, corresponding to adjusted P/E ratios of 25/26 years at 25/18 times [2] - The current stock price trades at adjusted P/E ratios of 25/26 years at 18/14 times [2]