Investment Rating - The investment rating for Meituan-W (03690.HK) is "Buy" (maintained) [1][12] Core Insights - The report indicates that the short-term competition in the instant delivery industry is intensifying, leading to increased user, rider, and merchant subsidies. The company is expected to face challenges in profit recovery due to order structure impacts on profit margins. However, there is optimism for profit growth driven by macroeconomic recovery and improvements in competitive dynamics in the medium term [5][6] - The company's revenue for Q2 2025 was 918 billion CNY, showing a year-over-year increase of 11.7%, but it fell short of Bloomberg's consensus estimate of 937 billion CNY. The non-IFRS net profit was 14.9 billion CNY, a significant decline of 89% year-over-year, primarily due to fierce competition in the delivery sector [6][7] - The report projects a non-IFRS net profit forecast for 2025-2027 to be -26 billion, 358 billion, and 588 billion CNY respectively, with an expected EPS of -0.4, 5.8, and 9.4 CNY for the same years. The current stock price corresponds to a PE ratio of 16.1 and 9.8 for 2026 and 2027 respectively [5][8] Financial Summary and Valuation Metrics - The financial metrics for Meituan-W are as follows: - Revenue (in million CNY): 2023A: 276,745; 2024A: 337,592; 2025E: 371,566; 2026E: 437,688; 2027E: 506,029 - Non-GAAP Net Profit (in million CNY): 2023A: 23,254; 2024A: 43,772; 2025E: -2,577; 2026E: 35,807; 2027E: 58,778 - Gross Margin (%): 2023A: 35.1; 2024A: 38.4; 2025E: 32.3; 2026E: 32.2; 2027E: 34.3 - Net Margin (%): 2023A: 8.4; 2024A: 13.0; 2025E: -0.7; 2026E: 8.2; 2027E: 11.6 - ROE (%): 2023A: 9.6; 2024A: 16.8; 2025E: -0.9; 2026E: 10.5; 2027E: 14.3 - EPS (diluted, CNY): 2023A: 3.7; 2024A: 7.0; 2025E: -0.4; 2026E: 5.8; 2027E: 9.4 - P/E (times): 2023A: 25.1; 2024A: 13.2; 2025E: NA; 2026E: 16.1; 2027E: 9.8 - P/B (times): 2023A: 4.2; 2024A: 3.8; 2025E: 2.9; 2026E: 2.3; 2027E: 1.8 [8]