Investment Rating - The investment rating for Meituan-W (03690) is "Buy" (maintained) [1] Core Views - In Q1 2025, Meituan's total revenue reached 86.6 billion yuan, representing a year-over-year increase of 18%, slightly above Bloomberg consensus expectations by 1.3% [4] - Adjusted EBITDA was 12.3 billion yuan, up 52% year-over-year, exceeding Bloomberg consensus expectations by 6.2% [4] - Adjusted net profit was 10.9 billion yuan, a 46% increase year-over-year, significantly surpassing Bloomberg consensus expectations by 12.6% [4] - Core local business revenue was 64.3 billion yuan, also up 18% year-over-year, exceeding Bloomberg consensus expectations by 1.5% [4] - New business revenue was 22.2 billion yuan, a 19% year-over-year increase, also above Bloomberg consensus expectations by 1.4% [4] Summary by Sections Business Performance - Meituan's food delivery and flash purchase businesses have improved user stickiness and purchase frequency through refined operations [5] - The food delivery segment has introduced differentiated products to meet diverse consumer needs and has implemented measures to enhance food safety [5] - Flash purchase has seen significant growth across various consumer categories, with transaction volume increasing nearly threefold in recent months [5] International Expansion - Keeta, a subsidiary, is expanding internationally, having entered the Brazilian market with a commitment to invest 1 billion USD over the next five years [6] Financial Projections - Revenue projections for 2025-2027 are estimated at 386.3 billion, 454.3 billion, and 526.7 billion yuan, with growth rates of 14%, 18%, and 16% respectively [7] - Adjusted net profit projections for the same period are 38.4 billion, 49.9 billion, and 60.8 billion yuan, with growth rates of -12%, 30%, and 22% respectively [7] Long-term Outlook - The report maintains a positive long-term outlook on Meituan's operational capabilities and business barriers, emphasizing its "extreme execution" in retail exploration [7]

Core Insights - The company reported 1Q25 revenue of 86.6 billion yuan, an 18% year-on-year increase, exceeding expectations by 1.4% [1] - Adjusted net profit for 1Q25 was 10.95 billion yuan, surpassing expectations by 21%, driven by better-than-expected core local business operating profit and lower-than-expected losses from undistributed projects [1] - The adjusted net profit margin stood at 12.6% [1] Revenue Growth Trends - In 1Q25, core local business revenue grew 18% to 64.3 billion yuan, with takeaway orders expected to maintain a growth rate of nearly 10% and revenue increasing by 14% [1] - For 2Q25, takeaway order volume is projected to continue the same year-on-year growth rate, but revenue is expected to increase by only 5% due to subsidy impacts [1] - Instant retail segment saw a 32% growth in order volume in 1Q25, with expectations of maintaining this growth rate in 2Q25 following the launch of the "Meituan Flash Purchase" brand [1] - The in-store hotel and travel segment's gross transaction value (GTV) grew 30% in 1Q25, with a forecasted 28% growth in 2Q25 [1] Operating Profit Margin (OPM) Insights - Core local business operating profit increased by 39% to 13.49 billion yuan in 1Q25, exceeding expectations by 10%, with OPM rising from 17.8% to 21% [2] - However, 2Q25 operating profit margin for takeaway is expected to decline due to intensified industry competition and increased subsidy investments [2] - The in-store hotel and travel business's OPM is anticipated to slightly decrease in 2Q25 due to factors such as expansion into lower-tier cities and seasonal variations [2] New Business Developments - New business revenue grew 19% to 22.2 billion yuan in 1Q25, with operating losses narrowing to 2.27 billion yuan, better than expectations [3] - For 2Q25, new business revenue is projected to increase by 21% to 26.1 billion yuan, with expected operating losses rising to 2.6 billion yuan due to overseas investment [3] - The company plans to expand into more cities in Saudi Arabia and potentially enter the Brazilian market later in the year [3] Profit Forecast and Valuation - The company has lowered its adjusted net profit forecasts for 2025 and 2026 by 13% and 5% to 40.9 billion yuan and 54.1 billion yuan, respectively, due to increased subsidy pressures and overseas investments [3] - Despite these adjustments, the company maintains an outperform rating and a target price of 177 HKD, corresponding to 25/26 adjusted P/E ratios of 25/18 times [3] - Current stock price trades at 25/26 adjusted P/E ratios of 18/14 times [3]

Investment Rating - The report maintains a "Buy" rating for Meituan-W (03690.HK) [10] Core Views - In Q1 2025, Meituan achieved revenue of 865 billion CNY, a year-on-year increase of 18.1%, and a Non-IFRS net profit of 10.9 billion CNY, up 46.2% year-on-year [2] - The core local business revenue reached 643 billion CNY, growing 17.8% year-on-year, with an operating profit of 135 billion CNY, reflecting a 39.1% increase and an operating profit margin of 21%, up 3.2 percentage points year-on-year [3] - The report highlights the healthy growth in food delivery and strong momentum in instant retail, although increased competition in Q2 may impact profits [3] - New business revenue grew by 19.2% year-on-year to 222 billion CNY, with operating losses narrowing by 17.5% to 2.3 billion CNY [4] Revenue and Profit Forecast - Projected revenues for 2025, 2026, and 2027 are 3862 billion CNY, 4461 billion CNY, and 4979 billion CNY respectively, with Non-IFRS net profits of 405 billion CNY, 530 billion CNY, and 706 billion CNY [5] - Corresponding P/E ratios are expected to be 17.93, 13.69, and 10.28 for the years 2025, 2026, and 2027 [5]

Core Insights - Meituan's Q1 financial results exceeded market expectations, with revenue of 865.57 billion RMB, a year-on-year increase of 18.1%, and adjusted net profit of 109.5 billion RMB, up 46.2% [1] - The core local business operating profit margin rose to 21%, despite CEO Wang Xing's warning of a significant year-on-year decline in Q2 core local business profits [1][2] - The competitive landscape in China's food delivery market has intensified, with rivals like JD and Ele.me implementing aggressive promotional policies [1][2] Financial Performance - The core local business generated revenue of 643.25 billion RMB, a 17.8% increase, contributing 74.3% of total revenue, with operating profit reaching 135 billion RMB, up 39.1% [2] - Revenue from delivery, commission, and advertising within the core local business was 257.2 billion RMB, 240.5 billion RMB, and 118.62 billion RMB, reflecting growth rates of 22.1%, 20.1%, and 15.1% respectively [2] - Meituan plans to pay social insurance for full-time and stable part-time delivery riders, with an expected average of 3.36 million riders nationwide by 2024 [2] New Business Growth - New business revenue grew by 19.2% to 222 billion RMB, with operating losses narrowing by 17.5% to 23 billion RMB, improving the operating loss margin by 4.6 percentage points to 10.2% [3] - The improvement in new business performance is attributed to growth in grocery retail and progress in overseas operations [3] International Expansion - Meituan announced a $1 billion investment in Brazil over the next five years, marking its entry into the South American market [4] - CEO Wang Xing expressed confidence in becoming a leading player in overseas markets [4]