Investment Rating - The report maintains a "Buy" rating for Meituan-W (3690.HK) [1] Core Views - The report emphasizes that Meituan is actively responding to competition in the food delivery sector while awaiting the release of long-term value [3] - The company's Q1 2025 financial performance exceeded market expectations, with significant growth in both revenue and profit metrics [11] Summary by Sections Overall Performance - In Q1 2025, Meituan achieved revenue of 866 billion RMB, representing a year-over-year increase of 18% and a quarter-over-quarter decrease of 2% [11] - Operating profit reached 106 billion RMB, up 103% year-over-year and 58% quarter-over-quarter [11] - Net profit was 101 billion RMB, reflecting an 87% year-over-year increase and a 62% quarter-over-quarter increase [11] - Non-GAAP EBITDA stood at 123 billion RMB, a 52% year-over-year increase [11] Business Segments - **Food Delivery Business**: In Q1 2025, the food delivery segment saw a steady growth with a year-over-year increase in order volume of 9.3%. The company plans to invest 100 billion RMB over the next three years to enhance the quality of the food service industry [7] - **Meituan Flash Purchase**: This segment maintained strong growth, with over 500 million cumulative transaction users by the end of March 2025. The daily order volume for non-food items exceeded 18 million [7] - **In-store and Travel Business**: The in-store and travel segment reported a year-over-year revenue growth of 20% in Q1 2025, with active merchant numbers increasing by over 25% [8] Financial Projections - Revenue forecasts for 2025-2027 are projected at 387.3 billion RMB, 447.7 billion RMB, and 510.6 billion RMB respectively. Non-GAAP net profit forecasts are 40.9 billion RMB, 54.7 billion RMB, and 67.6 billion RMB for the same years [18] - The target market capitalization for Meituan in 2025 is set at 830.2 billion RMB, with a target price of 136 RMB per share [18][19]

Core Viewpoint - The rise of instant delivery services is significantly driven by consumption upgrades and digital transformation, making it an essential part of life in lower-tier markets [1][2]. Group 1: Market Trends - The lower-tier market, including third-tier cities and rural areas, is becoming a new growth area for the food delivery industry, with a user base expected to grow from 124 million in 2014 to 799 million by 2024 [2]. - The online food delivery market in China is projected to reach a scale of 1.6357 trillion yuan in 2024, with a year-on-year growth of 7.2% and a penetration rate of 28% [4]. - Retail sales in urban areas are expected to reach 42.1166 trillion yuan in 2024, growing by 3.4%, while rural retail sales are projected at 667.29 billion yuan, with a growth rate of 4.3% [7]. Group 2: Policy and Competitive Landscape - Government policies are enhancing the commercial infrastructure in rural areas, promoting initiatives like "delivery to villages" to improve service coverage and reduce costs [10]. - Major players like Meituan, JD, and Ele.me are fiercely competing for market share in lower-tier cities, employing strategies such as zero commission and substantial subsidies [11]. - Local platforms like "Runter Kuaiche" are emerging to cater to specific needs in rural markets, leveraging their local knowledge and community ties to provide personalized services [16][17]. Group 3: Consumer Behavior - The primary consumer group in the lower-tier market consists of individuals aged 25-44, with a significant female user base of 67.01%, who prefer a blend of online and offline shopping experiences [19]. - Over 60% of users order food delivery more than three times a week, with social recommendations playing a crucial role in their decision-making process [19]. Group 4: Future Outlook - The lower-tier market is anticipated to become the "second growth curve" for China's instant delivery industry, driven by ongoing policy support and technological advancements [21].

Core Insights - The takeaway from the articles is that the food delivery industry in China has expanded significantly beyond just restaurant meals to include a wide range of products such as groceries, beauty products, and more, becoming a crucial part of daily life for many consumers [1][17]. Industry Overview - The food delivery market in China has grown from CNY 301.29 billion in 2017 to CNY 1,635.7 billion in 2024, with a compound annual growth rate (CAGR) of 27.34% [1][17]. - The penetration rate of the industry has increased from 7.6% in 2017 to 28% in 2024, indicating a growing acceptance and reliance on food delivery services [1][17]. - The industry is driven by the fast-paced lifestyle of urban professionals and students, making food delivery a daily necessity [1][17]. Development Background - The per capita consumption expenditure in China is projected to reach CNY 28,227 in 2024, with food and beverage spending accounting for 29.8% of this figure [10]. - The growth in consumer spending, particularly in food and beverages, reflects an overall increase in consumer purchasing power and a shift in consumption patterns, further supporting the expansion of the food delivery sector [10]. Current Market Status - The restaurant industry in China saw revenues of CNY 4.67 trillion in 2019, with a recovery trend post-COVID-19 leading to projected revenues of CNY 5.62 trillion in 2024 [12]. - The online food delivery user base reached 592 million by the end of 2024, representing 53.4% of the total internet users in China [13]. Competitive Landscape - Major players in the market include Meituan-W, Ele.me, and JD Group, each offering unique services and focusing on different market segments [19][20]. - Meituan-W leads the market with comprehensive food search and delivery services, while Ele.me has expanded into new retail and instant delivery services [19][20]. - JD Group launched its food delivery service in 2025, focusing on chain brands and leveraging its logistics capabilities [19][20]. Delivery Methods - The food delivery industry employs three main delivery methods: dedicated delivery, self-delivery, and crowdsourced delivery, each with its own advantages and disadvantages [4]. - Dedicated delivery offers stability and efficiency but comes with higher costs, while self-delivery allows merchants to control costs but requires significant resource investment [4]. - Crowdsourced delivery provides flexibility and a large delivery network but may incur additional costs for merchants [4]. Future Trends - The "lazy economy" is driving the growth of the food delivery market as consumers increasingly prefer convenience over traditional shopping methods [26]. - The industry is also seeing advancements in delivery technology, including contactless delivery options and the introduction of autonomous delivery vehicles [27]. - The range of products available for delivery is diversifying, moving beyond food to include everyday essentials and other categories, reflecting changing consumer needs [28].

Core Insights - The internet industry witnessed significant developments on April 30, with Ele.me launching a "super 10 billion" promotional campaign and Taobao's instant retail service "Xiaoshida" rebranding to "Taobao Flash Purchase," marking Taobao's entry into the takeaway market [1][2] Group 1: Market Developments - Taobao Flash Purchase has been launched in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen, although it is not yet available in Jinan [2] - The price comparison for a popular meal set across platforms shows that Taobao Flash Purchase and Ele.me have competitive pricing, but Meituan offers the lowest prices [5] - The collaboration between Taobao and Ele.me aims to enhance user experience by providing significant discounts and integrating Taobao's e-commerce advantages with Ele.me's delivery services [5][7] Group 2: Competitive Landscape - The partnership between Taobao and Ele.me is expected to leverage Taobao's vast user base and advanced recommendation algorithms to boost Ele.me's order volume [7] - The total subsidy from the three major platforms (Meituan, Ele.me, and Taobao) is projected to reach 30 billion yuan, indicating a fierce price competition in the market [7] - The current market share shows Meituan leading with 65%, followed by Ele.me at 33%, while JD's instant delivery service is gaining traction with over 10 million daily orders [10]

Group 1 - JD.com plans to recruit 100,000 full-time delivery riders over the next three months, offering comprehensive social insurance and a guaranteed minimum salary of 5,000 yuan per month for the first three months of employment [1][2] - The total estimated cost for JD.com to recruit these riders, including social insurance and guaranteed salaries, is approximately 2 billion yuan over three months [2] - The initiative aims to enhance JD.com's delivery business and attract more riders by providing better benefits compared to competitors [2][6] Group 2 - The recruitment strategy is expected to improve JD.com's logistics network and service efficiency, positioning the company favorably in the competitive instant delivery and food delivery markets [6] - JD.com has already seen significant growth in its delivery orders, with over 10 million orders processed by April 22, 2023, indicating a strong demand for its services [5][6] - The company's commitment to providing full social insurance for its riders sets it apart from competitors like Meituan and Ele.me, which only offer partial benefits in select cities [6]