Core Viewpoint - The company is expected to face significant pressure on profits due to intensified competition in the food delivery and instant retail sectors, despite an increase in order volume. Group 1: Financial Projections - For Q2 2025, the company anticipates adjusted net profit to be 7.7 billion yuan, with revenue expected to grow by 13% year-on-year to 92.9 billion yuan, resulting in an adjusted net profit margin of 8.3% [1] - The company's core local business operating profit is projected to decline by 33% year-on-year to 10.2 billion yuan, with an operating profit margin (OPM) of 15.2% [1] - The overall operating profit margin for the core local business is expected to decrease to 12.6% for the full year, with a total operating profit of 35.3 billion yuan, reflecting a 33% year-on-year decline [2] Group 2: Competitive Landscape - The food delivery market is experiencing heightened competition, particularly with competitors like JD.com and Taobao launching aggressive subsidy campaigns, which have led to a significant increase in order volume [1] - The company has responded to competition by implementing various promotional strategies, including large consumer coupons and new product offerings, which have resulted in a 14% year-on-year increase in food delivery order volume for Q2 2025 [1] - Instant retail orders have also surged, with peak order volume reaching 150 million, driven by the company's participation in promotional events [2] Group 3: New Business Developments - The company has decided to further scale back its Meituan Youxuan business, leading to a reduction in expected losses for new businesses from 10.4 billion yuan to 6.7 billion yuan for the year [2] - Despite the reduction in losses, the revenue growth forecast for new businesses has been adjusted down to 10% due to limited contributions from overseas expansion and the closure of operations in many regions [2] Group 4: Valuation Adjustments - The company has revised its adjusted net profit forecasts for 2025 and 2026 down by 30% and 19% respectively, now projecting 28.6 billion yuan and 43.8 billion yuan [2] - The target price has been lowered by 12.4% to 155 HKD, reflecting a 20 times adjusted price-to-earnings ratio for 2026, with a potential upside of 23.5% [2]

Core Viewpoint - Meituan's decision to exit loss-making cities while retaining operations in Guangdong and Hangzhou reflects a strategic shift towards reducing losses and focusing on profitable areas [5][6]. Group 1: Business Adjustments - Meituan's organizational restructuring involves consolidating 17 provincial regions into 9 to enhance efficiency and reduce costs, with a focus on collaboration between operational and commercial divisions [6]. - The overall scale of Meituan's business has decreased from over 1 trillion to between 700 and 800 billion, emphasizing the need to improve profit margins as a primary concern [7]. Group 2: Product Strategy Changes - The importance of commercial division has increased, leading to significant adjustments in product strategy, including the reduction of white-label products and a focus on increasing profit margins across various product categories [7]. - Meituan has ceased most subsidies earlier this year, indicating a shift towards profitability rather than market share competition, particularly against competitors like Pinduoduo [7]. Group 3: New Business Initiatives - The launch of the "N project," which focuses on offline operations and aims to compete with Hema, signifies Meituan's latest strategic pivot, highlighting the necessity of strong product and supply chain capabilities [7].

Group 1 - Meituan Youxuan has decided to shut down operations in certain regions while retaining its business in Guangdong and Hangzhou [1] - The decision was finalized after discussions within the company last week, indicating a strategic shift in operations [1] - Many team members from Meituan Youxuan are transitioning to the newly launched offline business "N Project" under Xiaoxiang Supermarket, which is focused on store operations [1] Group 2 - The primary objective for Meituan in recent times has been to reduce losses, with Meituan Youxuan being a critical focus area for this strategy [1] - Regardless of whether the business continues or is shut down, the company is facing significant pressure [1]

Core Viewpoint - Meituan's decision to shut down operations in certain regions while retaining business in Guangdong and Hangzhou reflects a strategic shift towards reducing losses in its Meituan Youxuan segment, with a focus on transitioning resources to the new offline project "N Project" led by Gao Yulong [1][2] Group 1: Business Adjustments - Meituan Youxuan has undergone significant organizational restructuring, consolidating from 17 provinces to 9 to achieve cost reduction and efficiency [2] - The integration of operational and commercial divisions aims to leverage business data for strategic guidance, aligning with Meituan's operational philosophy [2] - The overall scale of Meituan Youxuan has decreased from over 1 trillion to approximately 700-800 billion, with a heightened focus on improving profit margins [2] Group 2: Product Strategy Changes - The emphasis on profitability has led to a rapid reduction in promotional products, private label items, and subsidies, with a notable withdrawal of white-label products [2] - The strategy has shifted to prioritize higher profit margins across various product categories, even affecting traditionally low-margin items like eggs [2] Group 3: Competitive Landscape - Since August 2024, Meituan Youxuan has reduced its focus on competitor Duoduo Maicai, indicating a shift in strategy to concentrate on its own market strengths [3] - The contrasting business models between Meituan and Duoduo Maicai highlight the challenges Meituan faces in adapting to a platform-based revenue model, which includes multiple income streams [3] - The transition to the "N Project" signifies Meituan's latest strategic pivot towards offline operations, emphasizing the importance of brand development and supply chain capabilities [3]

Core Viewpoint - Meituan's decision to shut down the majority of its "Meituan Youxuan" business and focus on the new "N Project" for Xiaoxiang Supermarket reflects a strategic shift towards offline operations and cost reduction amidst ongoing losses in the instant retail sector [4][5]. Group 1: Business Adjustments - Meituan Youxuan has undergone significant organizational restructuring, consolidating from 17 regions to 9 to enhance efficiency and reduce costs, with a focus on integrating operational and commercial divisions [5]. - The overall scale of Meituan Youxuan's business has decreased from over 1 trillion to a range of 700 to 800 billion, highlighting a shift towards profitability as a primary concern [5]. - The strategy has involved reducing reliance on loss-leading products and subsidies, with a notable withdrawal from white-label products and a push for higher profit margins across various categories [5][6]. Group 2: Competitive Landscape - Meituan Youxuan has shifted its focus away from closely monitoring competitors like "Pinduoduo" and its "Duoduo Maicai" service, indicating a strategic pivot to concentrate on its own market strengths [6]. - The competitive advantage of Pinduoduo lies in its platform model, which allows for multiple revenue streams, contrasting with Meituan's historically self-operated approach in a market that is unfamiliar to it [6]. Group 3: Future Directions - The launch of the "N Project" aims to establish a new offline business model that competes with Hema NB, emphasizing the importance of brand development and supply chain capabilities [7].