Meituan (3690.HK) 3Q25 Review Summary Company Overview - **Company**: Meituan (3690.HK) - **Market Cap**: HK$639.4 billion / $82.1 billion - **Enterprise Value**: HK$464.2 billion / $59.6 billion - **Current Price**: HK$102.50 - **Target Price**: HK$120.00 - **Upside Potential**: 17.1% [7][3] Key Financial Highlights - **3Q25 Adjusted Operating Loss**: -Rmb17.5 billion (better than expected vs. GSe of -Rmb18.8 billion) [1] - **Food Delivery and Instashopping Losses**: Estimated at -Rmb19 billion [1] - **New Initiatives Loss**: -Rmb1.3 billion (better than GSe/VA of -Rmb2.3 billion) [1] - **Expected 4Q Losses**: Substantial food delivery losses anticipated, but a rebound expected in 1Q26 due to CNY seasonality [1] - **3Q On-Demand Losses**: Peaked, with narrower losses expected for 4Q25E/1Q26E [1] Market Position and Competitive Landscape - **Market Share**: Meituan maintains leading GTV market share with higher AOV orders [1] - **Comparison with Competitors**: Meituan's losses per order are -Rmb2.6 compared to Alibaba's -Rmb5.2 [1] - **Competition**: Increased competition from Douyin and Amap affecting in-store, hotel, and travel margins [1] Strategic Insights - **Path to Profitability**: Increased visibility for international business, with Keeta turning profitable in Hong Kong [1] - **User Subsidies**: Focus on protecting high-quality users to support higher ROI and lifetime value [19] - **Investment in New Initiatives**: Continued investment in Instashopping and overseas expansion, with expected losses in the short term [30] Future Outlook - **Revenue Growth Forecast**: - **2024**: Rmb337,591.8 million - **2025E**: Rmb366,000.0 million - **2026E**: Rmb408,093.2 million - **2027E**: Rmb451,767.9 million [7] - **EBITDA Forecast**: - **2024**: Rmb49,119.6 million - **2025E**: -Rmb13,207.4 million - **2026E**: Rmb20,824.3 million - **2027E**: Rmb53,882.2 million [7] Risks and Challenges - **Competition Risks**: Potential for prolonged losses from competitors like Alibaba, which could suppress Meituan's margins [21] - **Market Dynamics**: Shift from capital-driven competition to efficiency-driven competition expected [29] - **Regulatory Risks**: Food safety concerns and stricter regulations could impact operations [30] Valuation Scenarios - **Base Case Valuation**: HK$120 per share, reflecting a more fragmented long-term landscape with reduced market share [25] - **Bull Case Valuation**: HK$152 per share, assuming continued leadership and ability to capture high-quality users [20] - **Bear Case Valuation**: HK$77 per share, if competition significantly impacts margins and growth [21] Conclusion - Despite near-term profitability challenges, Meituan's leadership in local services and potential for recovery in food delivery and Instashopping positions it favorably for future growth. The company maintains a Buy rating based on its strategic initiatives and market position [26]