Group 1: Q4 Performance Expectations - The company is expected to report Q4 revenue between 866.14 billion to 963.14 billion RMB, reflecting a year-on-year change of -2.1% to 8.8% [1][11] - The anticipated net profit for Q4 is projected to be between -168.06 billion to -87.41 billion RMB, indicating a year-on-year change of -370.1% to -240.5% [1][11] - Adjusted net profit for Q4 is forecasted to be between -161.00 billion to -52.34 billion RMB, with a year-on-year change of -263.5% to -153.1% [1][11] Group 2: Analyst Insights - Analysts from Kaiyuan Securities believe that the company is increasing investments to consolidate market share, with expectations of slow profit margin recovery due to intense industry competition in 2025 [4][14] - The company’s third-quarter performance was below expectations, with core business performance being unsatisfactory, although losses in new businesses were better than anticipated [4][14] - Long-term prospects for the company are seen positively, particularly in flash purchase and fresh retail businesses, with potential contributions from overseas markets [4][14] Group 3: Business Segment Performance - In the instant delivery segment, the company is increasing subsidies for users, riders, and merchants to maintain market share amid heightened competition [5][14] - The dine-in segment is experiencing slow profit margin recovery due to macroeconomic factors and order structure, with the company responding by expanding categories and adjusting order structures [6][15] - New business revenue grew by 15.9% year-on-year, with a reduction in operating loss rate by 2.5 percentage points, primarily due to improved efficiency in Hong Kong and the Middle East markets [7][16] Group 4: Recent Financial Results - The company reported third-quarter revenue of 95.5 billion RMB, a 2% year-on-year increase, slightly below expectations due to intensified competition in the delivery market [8][14] - Adjusted net loss for the third quarter reached 160 billion RMB, a significant decline from a profit of 12.8 billion RMB in the same period last year [8][14] - The core local commerce (CLC) revenue was 67.4 billion RMB, down 3% year-on-year, resulting in an operating loss of 14.1 billion RMB [8][14]

Core Insights - Meituan's Q3 2025 financial results show a revenue of 95.49 billion, a 2.0% increase, but operating profit (OP) at -19.76 billion, a decline of 244.4%, and adjusted net profit at -16.01 billion, down 224.8% [1] - The intense competition in the food delivery sector has led to lower-than-expected revenue growth and profitability, although the company maintains a strong long-term outlook for its core domestic business and new growth opportunities overseas [1][3] Group 1: Food Delivery Business - In Q3, the food delivery segment experienced a peak in competition, resulting in revenue decline and significant operating losses, although the company outperformed competitors in high-value order market share [2] - The company anticipates a more rational competitive environment in Q4, with expectations of reduced growth rates in order volume and improved average losses per order [2] Group 2: New Business Developments - New business revenue reached 28.04 billion, a 15.9% increase, with an operating loss of 1.28 billion, showing a notable improvement in operating profit margin (OPM) [3] - The entry of Keeta into the Brazilian market is expected to increase losses in Q4 due to initial investment costs, despite improvements in profitability in existing markets like Hong Kong and Saudi Arabia [3] Group 3: Investment Recommendations - The company’s Q3 performance was significantly impacted by competition in the food delivery sector, but it retains a competitive edge in high-value user engagement and operational efficiency [3] - Long-term growth potential remains strong, with a projected core local business GMV of approximately 2.7 trillion for 2025, leading to a target price of 141.9 HKD, maintaining a "strong buy" rating despite short-term disruptions [3]

Core Insights - The article highlights the intense competition in the food delivery sector, indicating that there are no clear winners in the ongoing battle, particularly in Q3 2025, where major players like Alibaba, Meituan, and JD.com are facing significant challenges and losses [3][5][8]. Summary by Sections Food Delivery Battle - Alibaba's aggressive strategy led to a profit drop of approximately 30 billion yuan, gaining market share but lacking evidence of successful e-commerce synergy [3][8]. - Meituan experienced a decline in market share and reported an operating loss of 14.1 billion yuan, marking its first loss since Q4 2022 [3][5]. - JD.com has reduced its investment in food delivery, focusing on user experience optimization instead [3]. Financial Performance - Meituan's core local business saw a significant shift, with operating profit dropping from 14.6 billion yuan to a loss of 14.1 billion yuan due to increased user incentives and marketing expenses [7]. - Meituan's sales costs rose by 23.7%, and marketing expenses surged by 90.9%, indicating a heavy reliance on subsidies to maintain market share [7]. - Alibaba's total profit dropped by 30 billion yuan in Q3, with a substantial portion of its planned 50 billion yuan subsidy nearly exhausted [8]. Market Dynamics - The competition has led to a significant change in market dynamics, with Alibaba and Meituan nearly equal in market share, while JD.com has lost about 8% [8]. - Both platforms are now focusing on high-value orders, with Meituan holding over 70% market share for orders above 30 yuan [8]. - The article notes that the intense competition has led to a temporary decrease in subsidy levels, allowing Meituan to regain some market share [8]. New Business Ventures - Meituan's new business segment reported a 15.9% revenue increase to 28 billion yuan, despite a 24.5% rise in operating losses [15]. - The company is expanding its offline retail efforts, with new stores like Xiaoxiang Supermarket and the discount store Happy Monkey [15]. - Meituan's overseas expansion continues, with Keeta achieving profitability in Hong Kong and launching operations in Brazil [16][18]. Future Outlook - Meituan's management expresses confidence in maintaining efficiency and market share despite ongoing losses [5][13]. - The company is preparing for a winter campaign to boost various metrics, including new store openings and promotional activities [12]. - The article concludes that while the core local business faces challenges, Meituan is committed to exploring new opportunities and maintaining its operational rhythm [18].

Financial Summary - Meituan's total revenue for Q1 FY25 was RMB 866 million, showing a year-over-year growth of 18.1% [1] - Gross profits reached RMB 324 million, with a gross profit margin (GPM) of 37.4% [1] - Operating profits were RMB 106 million, with an operating profit margin (OPM) of 12.2% [1] - Adjusted net profits for Q1 FY25 were RMB 97 million, reflecting a net profit margin (NPM) of 11.4% [1] Business Segments - Local commerce revenue was RMB 634 million, with a year-over-year growth of 17.8% [1] - Delivery service revenue was RMB 251 million, showing a year-over-year increase of 22.1% [1] - Commission revenue was RMB 241 million, with a year-over-year growth of 20.1% [1] - Marketing service revenue was RMB 119 million, reflecting a year-over-year increase of 15.1% [1] Strategic Initiatives - The company plans to invest RMB 100 billion over the next three years to enhance supply chain upgrades, merchant digital transformation, and stimulate consumer demand [2] - Meituan has launched "Meituan Flash Purchase" and "Meituan Little Elephant" brands for 30-minute delivery of daily necessities, collaborating with millions of retailers and brands [2] - The company is focusing on improving its membership system across various services, allowing users to accumulate points for benefits [5] Competitive Landscape - The management noted that high-intensity subsidies in the industry have stimulated demand for certain categories, particularly beverages, while maintaining stable growth in other food categories [6] - Meituan's established delivery network and system stability have helped it maintain order volume despite competitive pressures, enhancing user loyalty [8] - The company recognizes that some competitors' subsidy strategies may lead to unsustainable practices and lower service quality [7]