Core Insights - Meituan has successfully established its presence in Saudi Arabia within a year of launching its international expansion, and is now accelerating its growth in other Middle Eastern markets [2] Group 1: Meituan's Expansion in Saudi Arabia - Meituan's service in Saudi Arabia has expanded to cover 20 cities, including 11 new cities, and has partnered with nearly 7,500 merchants [3] - The company has deployed over 18,000 additional riders, creating flexible employment opportunities and new economic prospects [3] - Meituan's entry into the Saudi market has led to a market share of approximately 10% for its platform Keeta within five months, ranking it third in the market [3][5] Group 2: Market Dynamics and Competition - The entry of Keeta has stimulated growth in the overall food delivery market in Saudi Arabia, with an expected GMV growth of about 23% in 2024 [3] - Major competitors in the region include Hungerstation and Jahez, which have seen minimal impact on their market shares so far, but are expected to face increased competition as Keeta expands [5][10] - The GCC region, while having a population of under 60 million, boasts high GDP per capita and strong consumer spending power, making it an attractive market for instant delivery services [9] Group 3: Broader Middle Eastern Strategy - Beyond Saudi Arabia, Meituan is planning to enter additional Middle Eastern markets, including the UAE, Qatar, and Kuwait, with a three-year plan to cover all six Gulf Cooperation Council (GCC) countries [7] - Keeta has initiated a "Founding Vendor Program" in the UAE and Qatar, offering incentives for early merchant partnerships [7] - The GCC market presents opportunities for growth due to its digital infrastructure and high acceptance of instant delivery services, despite existing local competition [9][10] Group 4: Global Expansion Efforts - Meituan has also entered the Hong Kong market, achieving a market share of 44% within a year, and is planning to invest $1 billion in Brazil over the next five years [11] - The company is focusing on enhancing its supply chain capabilities through its retail business, Keemart, which has launched in Riyadh [6]

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 866 billion yuan in Q1 2025, representing an 18% year-on-year growth. The adjusted net profit reached 109 billion yuan, a 46% increase year-on-year, with an adjusted net profit margin of 13%, up 3 percentage points [1][9] - The company is expected to increase subsidies starting Q2 2025 to maintain its competitive edge amid rising competition, particularly in the food delivery segment [2][19] - The flash purchase business has seen a 30% increase in order volume year-on-year, with a historical high in profit margins, and the company plans to enhance subsidies to expand market reach [3][22] - The in-store business is experiencing strong growth, particularly in lower-tier cities, with a 33% increase in GTV year-on-year [4][23] - New business segments, particularly overseas food delivery, are actively expanding, with a 19% increase in revenue year-on-year, although operating losses have also increased [27] Summary by Sections Financial Performance - In Q1 2025, Meituan achieved a revenue of 866 billion yuan, with a year-on-year growth of 18%. The core local business generated 643 billion yuan in revenue, also up 18% year-on-year. The operating profit for the core local business was 135 billion yuan, a 39% increase year-on-year, with an operating profit margin of 21% [1][9][17] Business Segments - The food delivery segment saw a 10% increase in order volume year-on-year, with a revenue growth of 14%. The average order value (AOV) decline has continued to narrow [2][19] - The flash purchase segment's revenue grew approximately 33%, with operating profit reaching 800 million yuan [3][22] - The in-store business's revenue increased by 21% year-on-year, with a focus on expanding in lower-tier cities [4][23] Future Outlook - The company maintains a positive long-term outlook, expecting adjusted net profits of 447 billion yuan, 587 billion yuan, and 718 billion yuan for 2025, 2026, and 2027, respectively [7][29] - The competitive landscape is anticipated to remain challenging, but Meituan's operational capabilities and compliance improvements are expected to support sustainable growth [7][29]