Shenwan Hongyuan Securities·2025-08-29 09:19Investment Rating - The report maintains a "Buy" rating for Meituan [2][14][26] Core Insights - Meituan reported Q2 2025 revenue of RMB 91.8 billion, an 11.7% year-on-year increase, but below the consensus forecast of RMB 93.7 billion. Operating profit fell by 98.0% year-on-year to RMB 0.23 billion, and adjusted net profit decreased by 89.0% year-on-year to RMB 1.49 billion, significantly missing market expectations [9][14] - The company is facing intensified competition in the food delivery and on-demand retail sectors, leading to increased investments to maintain market share, which is expected to pressure short-term profitability [10][14] - Despite the challenges, Meituan's long-term profit outlook remains positive due to its strategic initiatives in expanding its Instashopping and overseas operations, as well as optimizing its business structure by exiting loss-making regions [14] Financial Summary - For 2023 to 2027, Meituan's projected revenue is expected to grow from RMB 276.7 billion in 2023 to RMB 484.7 billion in 2027, with a compound annual growth rate (CAGR) of approximately 15.3% [7][17] - Adjusted net profit is forecasted to decline to a loss of RMB 4.5 billion in 2025, followed by a recovery to RMB 38.5 billion in 2026 and RMB 57.6 billion in 2027 [7][14] - The adjusted EBITDA is expected to fluctuate significantly, with a projected value of RMB 13.3 billion in 2025, reflecting the impact of increased competition and investment [7][17] Business Performance - Core local commerce revenue grew by 7.7% year-on-year to RMB 65.3 billion in Q2 2025, but operating profit plummeted by 75.6% to RMB 3.7 billion, resulting in an operating margin of 5.7%, down 19.4 percentage points year-on-year [10][11] - Meituan's Instashopping segment saw robust growth, expanding its service offerings and achieving over 40% year-on-year order growth in Q2 2025 [11][12] - The company is actively investing in technology and expanding its delivery network, with R&D spending increasing by 17.2% year-on-year to RMB 6.3 billion in Q2 2025 [12][13]