Summary of Conference Call on Food Delivery Subsidy Impact on Freshly Made Drink (FMD) Players Industry Overview - The analysis focuses on the food delivery industry in China, particularly the freshly made drink (FMD) segment, with key players including Guming and Mixue [1][2]. Key Points and Arguments 1. **Intensified Competition**: The competition among food delivery platforms has intensified, with Meituan, Ele.me, and JD increasing their investments and subsidies. The expectation is that this investment phase will last longer than previous cycles [1][10]. 2. **Earnings Forecasts**: The 2025 earnings estimates for Guming and Mixue have been revised upwards due to prolonged food delivery subsidies. Guming's adjusted net profit forecast is now Rmb2.2 billion, a 9% increase, while Mixue's is Rmb5.4 billion, a 1% increase [22][23]. 3. **Impact of Subsidies**: If the food delivery subsidy continues into Q4 2025, Guming could see a GMV growth of 10%-25% per store, while Mixue could see 6%-14% growth. If subsidies are removed in 2026, Guming and Mixue could face declines of 2%-9% and 0%-4% in GMV per store, respectively [2][30]. 4. **Regulatory Environment**: There are calls from regulators for more rational competition among delivery platforms, with initiatives aimed at reducing aggressive subsidy practices. This could lead to a more stable competitive landscape in the long term [11][30]. 5. **Store Expansion Trends**: The FMD industry has seen an acceleration in store count growth, with brands like Guming and Lucky Cup expanding rapidly. However, some brands continue to experience net closures [17][20]. 6. **Price Dynamics**: The competitive landscape has led to increased price activity, with brands adjusting prices to attract customers. For instance, Starbucks and Guming have both lowered prices for certain products [18][30]. 7. **Long-term Outlook**: Despite short-term volatility due to subsidy dynamics, the long-term outlook for Mixue and Guming remains positive, supported by their supply chain advantages and brand strength [8][22]. Additional Important Insights - **Delivery Volume Growth**: The food delivery industry is expected to see significant growth in order volume, with estimates of 46%-50% year-over-year growth in Q3 and Q4 2025 [30]. - **Investment in Infrastructure**: Platforms are also investing in kitchen infrastructure to enhance service efficiency and food safety, which could further impact competition [14][16]. - **Market Sentiment**: Investor sentiment towards delivery platforms will significantly influence the near-term share prices of Mixue and Guming, with concerns about potential GMV pullbacks if subsidies are reduced [3][8]. This summary encapsulates the critical insights from the conference call regarding the food delivery subsidy impact on the FMD industry, highlighting both immediate effects and long-term implications for key players.

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Summary of Key Points from the Conference Call Industry Overview - **Industry**: Food Delivery Platforms in China - **Key Players**: Alibaba (BABA), Meituan, JD.com (JD) Core Insights - **Curbing Competition**: The three major food delivery platforms have committed to reducing "disorderly competition" and will stop price-based rivalries, including 'zero-cost purchases' and allowing merchants to independently engage in promotional activities [1][2][3] - **Regulatory Influence**: This decision follows meetings with the State Administration for Market Regulation (SAMR) and Shanghai market regulators, indicating a peak in competitive intensity expected in Q3 2025, with caution advised for the competitive landscape thereafter [2][3] Financial Performance and Stock Recommendations - **Stock Preferences**: Analysts prefer Alibaba (BABA) over Meituan and JD.com. They believe that near-term earnings pressure for Alibaba is already reflected in its stock price, while the market undervalues its potential as a leading AI enabler in China [3] - **Valuation Metrics**: - Alibaba is trading at 12x F27e - Meituan is trading at 19x F26e - JD.com is expected to face higher revenue comparisons starting September 2025 and is projected to remain a minor player in food delivery and quick commerce long-term [3] Competitive Landscape - **Subsidy Programs**: - JD announced a RMB10 billion subsidy program for its food delivery business [4] - Meituan pledged a RMB100 billion investment in demand delivery over three years [4] - Alibaba initiated a RMB50 billion subsidy program [4] - **Order Growth**: - JD's daily food delivery orders grew rapidly, reaching 25 million by June 2025 and 150 million by July 2025 [4] - Ele.me (Alibaba's service) also saw significant growth, surpassing 60 million daily orders by June 2025 [4] Market Dynamics - **Expected Subsidies**: Total subsidies are projected to be RMB30 billion and RMB50 billion in Q2 and Q3 2025, respectively, marking a peak in investment [5][8] - **Profitability Outlook**: Long-term profitability for Meituan has been revised downwards, with food delivery gross transaction value (GTV) margins expected to be below 3% and Instashopping below 2% [8] Risks and Considerations - **Market Risks**: - Potential for irrational competition to return in e-commerce - Weaker-than-expected macroeconomic conditions and antitrust regulations could impact profitability [13][15] - **Growth Opportunities**: - Faster-than-expected margin expansion and successful penetration in lower-tier cities could drive user growth [14] Conclusion - The food delivery industry in China is undergoing significant changes due to regulatory pressures and competitive dynamics. Analysts remain cautious but see potential in leading players like Alibaba, while also highlighting the risks associated with ongoing competition and market conditions.

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Core Viewpoint - BoA Securities analyst Justin Post maintains a Buy rating on Uber Technologies Inc with a price target of $115, citing strong performance expectations ahead of the second-quarter earnings report [1] Financial Projections - The second-quarter gross bookings forecast has been raised to $47.1 billion, which is 2% above the consensus estimate of $46.4 billion. Revenue and adjusted EBITDA projections are set at $12.56 billion and $2.12 billion, respectively, both slightly above consensus [2] - Constant currency bookings growth is expected to be 19% year-over-year, ahead of the 18% consensus, driven by increased U.S. consumer spending and improved international results due to favorable foreign exchange conditions [2] Mobility Segment - In the Mobility segment, a 20% year-over-year constant currency growth is projected, consistent with first-quarter trends, supported by increasing transit spending [3] - Despite weak U.S. travel demand, a recovery is anticipated in the second half of 2025, which is expected to bolster future growth [3] - Uber's expanding autonomous vehicle ecosystem, including partnerships with Lucid Group, Nuro, Baidu, and Wayve, is gaining traction, particularly in Atlanta and Austin [3] Delivery Segment - For the Delivery segment, a 19% year-over-year growth is forecasted, slightly accelerating from the first quarter, attributed to strong adoption of Uber One and new perks launched in the second quarter [4] - The Advertising business is also showing strength, with a 60% year-over-year growth in the first quarter [4] - The upcoming acquisition of Trendyol GO in Turkey is expected to contribute to Delivery growth once finalized in the second half of 2025 [5] Future Outlook - Third-quarter bookings are projected to be in the range of $47.25 billion to $48.75 billion, indicating a 17% year-over-year growth at the midpoint, with EBITDA forecasted between $2.26 billion and $2.36 billion [5] - For the full year 2025, estimates have been raised to $190 billion in gross bookings, $51.1 billion in revenue, and $8.62 billion in EBITDA, all exceeding Street expectations [6] Valuation Perspective - Despite a 44% year-to-date stock gain, Uber's valuation remains attractive, trading at 17 times EV/EBITDA compared to its four-year average of 22 times and 18 times free cash flow, significantly lower than FANG peers at 43 times [7] - An expected bottom-line growth rate of 26% for 2026 is projected, compared to 19% for FANG, indicating potential for upside [7]

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Industry Dynamics - Food-delivery vendors face a dilemma due to fluctuating pricing and special offers on competing apps [1] - Vendors must choose between reducing prices or risking being overlooked [1]

Core Viewpoint - Taobao and Ele.me jointly announced their commitment to resist malicious competition and promote ecological win-win cooperation, outlining four key areas of focus for future operations [1] Group 1: Key Initiatives - The companies will plan and distribute subsidies based on consumer and merchant needs [1] - They will actively eliminate unfair competition practices and avoid irrational promotional activities such as large-scale "0 yuan purchase" campaigns [1] - Continuous improvement of service quality will be prioritized, including the provision of diverse consumption scenarios and enhanced delivery network efficiency [1] - A "listening-consulting-optimizing-feedback" system has been established to address core issues such as merchant participation, product quality, and rider rights, with multiple discussion meetings being held across various locations [1]

Core Viewpoint - The article emphasizes the commitment of Taobao and Ele.me to resist malicious competition and promote ecological win-win cooperation, outlining four key areas of focus for future operations [1] Group 1: Key Initiatives - The companies will plan and distribute subsidies based on consumer and merchant needs [1] - There is a strong commitment to resist malicious competition, with a focus on eliminating unfair practices and stimulating consumption potential in emerging markets [1] - Continuous improvement of service quality is a priority, including the enhancement of diverse consumption scenarios and the efficiency of the delivery network [1] - The companies aim to foster ecological win-win cooperation by establishing a feedback system that addresses core issues such as merchant participation, product quality, and rider rights [1]

Innovation and Technology - Domino's partnered with Boston Dynamics to create Dama Dog, a robot pizza delivery dog [1] - Dama Dog uses cameras and sensors to navigate and avoid obstacles like seagulls [2] - The robot is designed to communicate with customers using audio and visual cues [3] Pilot Program and Future Prospects - Dama Dog is currently in a pilot program in the UK [1][3] - Domino's views Dama Dog as a glimpse into the future of pizza delivery innovation [3]