Group 1 - The short-term instant delivery industry is experiencing intensified competition, leading to increased investments in user, rider, merchant subsidies, and ecosystem development [1] - The company has adjusted its non-IFRS net profit forecasts for 2025-2027 to -26 billion, 358 billion, and 588 billion respectively, down from previous estimates of 506 billion, 638 billion, and 779 billion [1] - The company aims to consolidate market share through increased subsidies in 2025, with expectations of a return to profitability in 2026 and a projected net profit growth rate of 64.2% in 2027 [1] Group 2 - In Q2 2025, the company's revenue was 918 billion, a year-on-year increase of 11.7%, slightly below Bloomberg's consensus estimate of 937 billion [2] - The non-IFRS net profit for Q2 2025 was 14.9 billion, a year-on-year decrease of 89%, significantly lower than the consensus estimate of 98.5 billion, primarily due to intense competition in the delivery industry [2] - Core business revenue grew by 7.7% year-on-year, with delivery service revenue increasing by 2.8%, but the growth rate lagged behind the increase in instant delivery transaction volume due to higher subsidy deductions [2]

Core Insights - Meituan reported a revenue growth of 11.7% year-on-year to 91.8 billion yuan in Q2 2025, despite a significant decline in operating and net profits [1] - The decline in profits is attributed to intense market competition, with operating profit dropping by 98% to 226 million yuan and adjusted net profit decreasing by 89% to 1.493 billion yuan [1] - Sales costs increased by 27% to 61.4 billion yuan, rising from 58.8% to 66.9% of total revenue, driven by increased delivery volumes, rider subsidies, retail business expansion, and overseas investments [1] - Sales and marketing expenses surged by 51.8% to 22.5 billion yuan, accounting for 24.5% of revenue, due to business expansion and heightened competition in food delivery and instant retail [1] Business Performance - The core local commerce segment achieved a revenue of 65.3 billion yuan, reflecting a 7.7% year-on-year growth, indicating strong user engagement and transaction frequency [1] - The number of monthly active users on the Meituan app surpassed 500 million, with annual transaction frequency reaching a historical high [1] Market Expansion - During the "618" shopping festival, Meituan supported nearly one million physical stores, serving over 100 million users, with high-ticket items seeing a twofold increase in transaction value [2] - Instant retail orders peaked at over 150 million in July, and in-store business orders grew by over 40% year-on-year, with active merchant numbers hitting a new high [2] - Meituan's international expansion saw Keeta's order volume and GTV continue to grow, solidifying its leading position in Hong Kong and expanding into 20 cities in Saudi Arabia and launching services in Qatar [2] Strategic Outlook - CEO Wang Xing emphasized the importance of balancing market share and profitability amid fierce competition, while focusing on technological innovation and ecosystem development to create value for partners and promote sustainable industry growth [2]

Core Viewpoint - Meituan reported a steady revenue growth in Q2 2025, but faced significant declines in operating and net profits due to intense market competition [1][2] Group 1: Financial Performance - In Q2 2025, Meituan's revenue increased by 11.7% year-on-year to 91.8 billion yuan [1] - Operating profit fell to 226 million yuan, a 98% decline year-on-year [1] - Adjusted net profit decreased by 89% year-on-year to 1.493 billion yuan [1] - Sales costs rose by 27.0% year-on-year to 61.4 billion yuan, accounting for 66.9% of revenue, up from 58.8% [1] - Sales and marketing expenses surged by 51.8% year-on-year to 22.5 billion yuan, representing 24.5% of revenue, up from 18.0% [1] Group 2: Business Operations - Core local commerce revenue reached 65.3 billion yuan, growing by 7.7% year-on-year [1] - Monthly active users of Meituan's app exceeded 500 million, with annual transaction frequency hitting a historical high [1] - During the "618" shopping festival, Meituan supported nearly one million physical stores, serving over 100 million users [2] - High-ticket item sales on the platform doubled, and daily order volume for instant retail peaked at over 150 million in July [2] - The dine-in business saw order volume grow by over 40% year-on-year, with active merchant numbers reaching a new high [2] Group 3: International Expansion and Future Outlook - Meituan's international operations saw growth, with Keeta's order volume and GTV continuing to rise [2] - Keeta solidified its leading position in Hong Kong and expanded to 20 cities in Saudi Arabia, with services recently launched in Qatar [2] - CEO Wang Xing emphasized the importance of balancing market share and profitability amid increasing competition, while focusing on technological innovation and ecosystem development [2]

Core Viewpoint - Meituan is focusing on AI transformation, particularly in three key areas: unmanned delivery, AI large models and applications, and embodied intelligence, aiming for significant growth in the future [2][11][19]. Group 1: AI Strategy and Investment - Meituan's AI strategy is divided into three main areas: unmanned delivery (including drones and automated delivery vehicles), AI large models and applications, and embodied intelligence [2][11]. - The company is investing heavily in AI, with R&D expenditure reaching 21.1 billion yuan in 2024, the highest since its inception [4][5]. - Meituan is restructuring its workforce to prioritize AI-related roles, reducing positions in operations while increasing algorithm and hardware engineering roles [5]. Group 2: Unmanned Delivery - Unmanned delivery is seen as a critical focus for Meituan by 2025, with two main divisions for automated vehicle delivery and drone delivery, both of which have been in commercial operation for years [12][13]. - The company adopts a "self-research" model for these projects, establishing its own production facilities and attracting talent through external collaborations and university competitions [13]. - Meituan is focused on increasing user engagement and operational metrics for unmanned delivery, recognizing its long-term potential despite current low order volumes [13]. Group 3: AI Large Models and Applications - Meituan's AI product offerings are categorized into foundational products, such as the Meituan AI platform, and consumer-facing products, including the Wow AI community app [16][17]. - The company aims to leverage AI tools to enhance core business operations and has set specific growth metrics tied to AI advancements [17][18]. - Following the success of the DeepSeek product, Meituan is exploring new AI consumer applications, indicating a shift in strategy towards direct user engagement [18]. Group 4: Embodied Intelligence - In the field of embodied intelligence, Meituan is focusing on investments in companies that align with its core business scenarios and ecosystem [19]. - The company has publicly disclosed over 19 investment projects related to robotics, emphasizing a strategy that integrates with its operational needs [19]. - Meituan's investment logic in this area revolves around creating a closed-loop ecosystem that supports its core business [19]. Group 5: Competitive Landscape - Meituan is currently facing intensified competition from JD.com and Douyin, particularly in the areas of food delivery and local services [7][9]. - Despite the competition, Meituan's market share remains stable, with its daily order volume significantly higher than that of its competitors [23]. - The company is actively engaging with key merchants to strengthen partnerships and maintain its competitive edge against rivals [26].