Ge Long Hui·2025-08-30 04:13Core Insights - The company reported total revenue of 91.8 billion RMB in Q2 2025, a year-on-year increase of 12%, slightly below market expectations by 1% and 2% [1] - Adjusted net profit decreased by 89% to 1.5 billion RMB, resulting in a net profit margin of 1.6% [1] - Core business adjusted operating profit fell by 76% to 3.7 billion RMB, with a profit margin of 5.7%, down 19 percentage points year-on-year, primarily due to irrational competition in the industry [1] Business Performance - Core business revenue growth lagged behind order volume growth, attributed to intensified industry competition and increased user subsidies to enhance price competitiveness and ensure delivery efficiency [1] - Estimated year-on-year growth in takeaway order volume is approximately 10%, with a significant decline in Average Order Value (AOV) [1] - The in-store travel and accommodation Gross Transaction Value (GTV) increased by nearly 30% year-on-year, but revenue growth was slower than GTV due to changes in category structure and market penetration [1] New Business Developments - The company is undergoing a strategic transformation in its new business segment, exiting loss-making areas [1] - The "Xiaoxiang Supermarket" is experiencing strong growth and plans to accelerate expansion into first- and second-tier cities [1] - Keeta's order volume and GTV are rapidly increasing, with coverage in 20 cities in Saudi Arabia as of the end of July [1] Future Outlook - Increased takeaway subsidies are expected to impact performance in the coming quarters, with a forecast of core business turning to losses in Q3 [2] - Q3 takeaway competition is expected to intensify, with projected daily order volume growth of 16% year-on-year, but a potential revenue decline of 6% due to subsidies and strategic adjustments [2] - New business revenue is expected to grow by 18% year-on-year, with anticipated losses of approximately 2.3 billion RMB [2] Valuation and Market Position - The company maintains a leading market position, with a high probability of sustaining market share despite short-term profit adjustments [2] - The target price has been adjusted to 147 HKD, with a maintained buy rating based on long-term projections for takeaway and in-store business profits [2]