Core Insights - Meituan achieved operating revenue of 86.6 billion yuan in Q1 2025, a year-on-year increase of 18% [1] - Adjusted net profit reached 10.9 billion yuan, up 46% year-on-year, with an adjusted net profit margin of 13%, an increase of 3 percentage points [1] - The core local business generated revenue of 64.3 billion yuan, also up 18% year-on-year, with an operating profit of 13.5 billion yuan, reflecting a 39% increase [1] Local Business Performance - The restaurant delivery, flash purchase, and in-store travel businesses saw revenue growth of 14%, 33%, and 19% respectively [1] - The average order value (AOV) continued to decline at a reduced rate, while the take rate for restaurant delivery increased due to growth in delivery and advertising revenue [1] - The company plans to increase subsidies in Q2 2025 to address competition, with projected order volume growth of 9% and revenue growth of 5% [1] Flash Purchase Business - Flash purchase order volume grew by 30% year-on-year, with a record high profit margin [2] - Revenue from flash purchase commissions and advertising increased by approximately 33% [2] - The company is expanding its instant delivery network in various product categories and plans to increase subsidies during the 618 shopping festival [2] In-store Business - The in-store travel business's gross transaction value (GTV) grew by 33%, with revenue increasing by 21% year-on-year [3] - The company is focusing on expanding in lower-tier cities and enhancing its membership program to increase transaction frequency [3] - Future membership benefits will cover more categories, aiming to strengthen Meituan's position as a preferred platform for consumers [3] New Business Developments - New business revenue grew by 19% to 22.2 billion yuan, although operating losses increased to 2.3 billion yuan [3] - The company is actively expanding its overseas delivery services, particularly in Saudi Arabia and plans to enter the Brazilian market with a commitment of 1 billion USD over five years [3] Investment Outlook - The company maintains an "outperform the market" rating, with adjusted net profit estimates of 44.7 billion, 58.7 billion, and 71.8 billion yuan for 2025-2027 [4] - Despite increased competition, the company's operational capabilities and compliance improvements are expected to support long-term growth [4] - The valuation is considered attractive compared to the Hang Seng Technology sector, with potential for upward catalysts from dynamic competition [4]

Investment Rating - The investment rating for Meituan-W (03690.HK) is "Outperform the Market" [5] Core Insights - The core local business of Meituan has shown excellent profit release, with a revenue of 86.6 billion yuan in Q1 2025, representing an 18% year-on-year growth. Adjusted net profit reached 10.9 billion yuan, up 46% year-on-year, with an adjusted net profit margin of 13%, an increase of 3 percentage points [1][9][19] - The company is expected to increase subsidies starting Q2 2025 to respond to competition, with projected order volume growth of 9% and revenue growth of 5% in the same period [2][19] - The flash purchase business saw a 30% year-on-year increase in order volume in Q1 2025, with a historical high profit margin, and the company plans to increase subsidies during the 618 shopping festival to expand market reach [3][22] - The in-store business GTV grew by 33% in Q1 2025, with a revenue increase of 21% year-on-year, and the company is actively expanding in lower-tier cities [4][23] - New business revenue grew by 19% year-on-year to 22.2 billion yuan, with a focus on expanding overseas delivery services, particularly in Saudi Arabia and plans to enter the Brazilian market [27] Financial Performance Summary - In Q1 2025, Meituan's core local business achieved a revenue of 64.3 billion yuan, with a year-on-year growth of 18%. The operating profit for this segment was 13.5 billion yuan, reflecting a 39% increase year-on-year and an operating profit margin of 21% [1][17] - The company forecasts adjusted net profits of 44.7 billion yuan, 58.7 billion yuan, and 71.8 billion yuan for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 16.6, 12.6, and 10.3 [7][29] - The adjusted EPS is projected to be 7.14 yuan for 2024, increasing to 9.50 yuan by 2027 [8][32]