Ge Long Hui·2025-08-30 04:13Core Insights - The company reported Q2 2025 revenue of 91.8 billion yuan, a year-on-year increase of 11.7%, but operating profit dropped by 98.0% to 230 million yuan, with adjusted EBITDA down 81.5% to 2.78 billion yuan and adjusted net profit down 89.0% to 1.49 billion yuan, missing market expectations [1][2] Group 1: Financial Performance - The core local business revenue grew by 7.7% year-on-year to 65.3 billion yuan, but operating profit fell by 75.6% to 3.7 billion yuan, with an operating margin decline of 19.4 percentage points to 5.7%, significantly below market expectations [2] - Adjusted net profit for 2025-2027 was revised down to -4.5 billion, 38.5 billion, and 57.6 billion yuan, respectively, from previous estimates of 44.3 billion, 56.7 billion, and 69.1 billion yuan [5] Group 2: Market Competition - The industry is experiencing intensified competition, with major players like JD and Taobao increasing their market presence through aggressive subsidy programs, leading to significant pressure on the company's short-term profitability [2] - The company is responding to competition by increasing investments to maintain market share, with peak daily order volume exceeding 150 million in July [2] Group 3: Business Expansion and Strategy - The company's new business revenue grew by 22.8% year-on-year to 26.5 billion yuan, but operating losses expanded by 43.1% to 1.9 billion yuan, indicating challenges in profitability despite revenue growth [4] - The company is focusing on enhancing its rider ecosystem, with plans to roll out pension insurance subsidies nationwide and improve rider welfare through various initiatives [3][4] Group 4: Long-term Outlook - Despite short-term profitability pressures, the company is expected to have long-term profit recovery potential due to its strategic initiatives in instant retail and overseas expansion [5] - The company maintains a "buy" rating, with a target market value of 797 billion HKD, reflecting a potential upside of 28% from the current market value [5]