Ge Long Hui·2025-07-19 11:30Core Viewpoint - The company is expected to face significant pressure on profits due to intensified competition in the food delivery and instant retail sectors, despite an increase in order volume. Group 1: Financial Projections - For Q2 2025, the company anticipates adjusted net profit to be 7.7 billion yuan, with revenue expected to grow by 13% year-on-year to 92.9 billion yuan, resulting in an adjusted net profit margin of 8.3% [1] - The company's core local business operating profit is projected to decline by 33% year-on-year to 10.2 billion yuan, with an operating profit margin (OPM) of 15.2% [1] - The overall operating profit margin for the core local business is expected to decrease to 12.6% for the full year, with a total operating profit of 35.3 billion yuan, reflecting a 33% year-on-year decline [2] Group 2: Competitive Landscape - The food delivery market is experiencing heightened competition, particularly with competitors like JD.com and Taobao launching aggressive subsidy campaigns, which have led to a significant increase in order volume [1] - The company has responded to competition by implementing various promotional strategies, including large consumer coupons and new product offerings, which have resulted in a 14% year-on-year increase in food delivery order volume for Q2 2025 [1] - Instant retail orders have also surged, with peak order volume reaching 150 million, driven by the company's participation in promotional events [2] Group 3: New Business Developments - The company has decided to further scale back its Meituan Youxuan business, leading to a reduction in expected losses for new businesses from 10.4 billion yuan to 6.7 billion yuan for the year [2] - Despite the reduction in losses, the revenue growth forecast for new businesses has been adjusted down to 10% due to limited contributions from overseas expansion and the closure of operations in many regions [2] Group 4: Valuation Adjustments - The company has revised its adjusted net profit forecasts for 2025 and 2026 down by 30% and 19% respectively, now projecting 28.6 billion yuan and 43.8 billion yuan [2] - The target price has been lowered by 12.4% to 155 HKD, reflecting a 20 times adjusted price-to-earnings ratio for 2026, with a potential upside of 23.5% [2]