Shenwan Hongyuan Securities·2025-05-27 15:00Investment Rating - The report maintains a "Buy" rating for Meituan [2][11] Core Insights - Meituan's Q1 2025 results exceeded expectations with revenue of RMB 86.6 billion, a year-on-year increase of 18.1%, and an operating profit of RMB 10.57 billion, up 102.8% year-on-year [6][7] - The core local business showed strong performance with a revenue increase of 17.8% to RMB 64.3 billion and an operating profit rise of 39.1% to RMB 13.5 billion, achieving an operating margin of 21.0% [8][11] - The company plans to invest RMB 100 billion over the next three years to enhance its ecosystem and support industry growth, amidst intensified competition [8][11] Financial Summary - Revenue projections for Meituan are as follows: - 2023: RMB 276.75 billion - 2024: RMB 337.59 billion - 2025E: RMB 390.04 billion - 2026E: RMB 451.01 billion - 2027E: RMB 505.43 billion [3][14] - Adjusted net profit estimates are: - 2025E: RMB 44.27 billion - 2026E: RMB 56.66 billion - 2027E: RMB 69.06 billion [3][11] - The report indicates a decrease in the price-to-earnings ratio from 33 in 2023 to 11 in 2027, reflecting improved profitability [3][11] Business Performance - Meituan's Instashopping segment saw significant growth, with over 500 million transaction users and daily non-food delivery orders exceeding 18 million [9][11] - New business revenue increased by 19.2% year-on-year to RMB 22.2 billion, with operating losses narrowing by 17.5% [10][11] - The company is expanding internationally, with Keeta becoming a leading food delivery platform in Saudi Arabia and plans to enter Brazil [10][11]