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 Viewpoint - In Q2 2025, Meituan achieved total revenue of 91.84 billion yuan, a year-on-year increase of 11.7%, but Non-GAAP net profit fell by 89% to 1.493 billion yuan, with both revenue and profit below Bloomberg consensus expectations [1][2] - The impact of intensified competition in the home delivery business on CLC profits is becoming evident, with expectations of significant deterioration in Q3 [1][2] - Long-term, the irrational competition in the industry may not be sustainable, and Meituan's food delivery profit margins are expected to return to reasonable levels [2][3] Revenue and Profit Analysis - Meituan's core local business generated revenue of 65.347 billion yuan in Q2, a year-on-year increase of 7.69%, with adjusted operating profit of 3.721 billion yuan, down 76% year-on-year [1] - Delivery service revenue was 23.7 billion yuan, up 2.76%, commission revenue was 25 billion yuan, up 12.86%, and online marketing service revenue was 13.5 billion yuan, up 10.48% [1][2] Market Competition and Future Outlook - The second quarter saw intensified competition in the food delivery market, with a rise in order volume but a decline in average order value (AOV) and revenue due to subsidies [2] - The expectation is that the food delivery unit economics (UE) will turn negative in Q2, with further declines anticipated in Q3 due to increased competition [2] - In the hotel and travel segment, GTV continued to grow rapidly, but revenue growth lagged behind due to structural impacts and decreased advertising spending by merchants [2] New Business Developments - Meituan's new business segment reported revenue of 26.5 billion yuan in Q2, a year-on-year increase of 23%, but incurred an adjusted operating loss of 1.9 billion yuan [3] - The launch of Keeta in Brazil is expected to create a new growth curve for Meituan, with long-term profit potential in overseas markets where AOV and profit margins are higher than in the domestic market [3] Financial Forecasts - Revenue projections for Meituan for FY25-27 are 372.105 billion yuan, 450.261 billion yuan, and 537.467 billion yuan, with growth rates of 10.22%, 21.00%, and 19.37% respectively [3] - Non-GAAP profits are expected to be -3.268 billion yuan, 26.677 billion yuan, and 46.477 billion yuan for the same periods [3] - The company maintains a "buy" rating with a target price of 150.00 HKD, corresponding to an 18X PE for 2027 [3]

Core Insights - Meituan reported Q2 2025 revenue of 91.8 billion RMB, a year-on-year increase of 11.7%, reinforcing its market leadership [2] - The Meituan app surpassed 500 million monthly active users, with record-high annual transaction frequency [2] - CEO Wang Xing emphasized the commitment to enhancing consumer experience and investing in technological innovation for sustainable industry development [2] Local Business Performance - The core local business segment achieved revenue of 65.3 billion RMB, growing 7.7% year-on-year [2] - Meituan maintained its market leadership in the instant delivery sector, with peak daily order volume exceeding 150 million in July [2] - Average delivery time for full-service orders was 34 minutes, indicating improved user engagement [2] New Business Growth - New business segment revenue reached 26.5 billion RMB, a 22.8% year-on-year increase, with losses narrowing to 1.9 billion RMB [4] - Meituan's international expansion saw strong growth in Keeta's order volume and GTV, with significant market presence in Hong Kong and new services launched in Saudi Arabia and Qatar [4] Supply-Side Innovations - Meituan partnered with over 800 leading restaurant brands to open more than 5,500 satellite stores, aiming for over 10,000 by year-end [3] - The "flash purchase" service saw strong growth, expanding product categories beyond groceries to include electronics and beauty products [3] - The number of orders for in-store services grew over 40% year-on-year, with record transaction volume in travel services during the May holiday [3] Rider and Merchant Support Initiatives - Meituan implemented full coverage of work injury insurance for riders in 17 provinces, with plans for nationwide pension insurance subsidies by year-end [6] - The company established a 1.6 billion RMB summer rider support fund and expanded health care plans for riders and their families [6] - Meituan's initiatives to support merchants included cash subsidies and operational innovations, benefiting over 300,000 restaurant businesses [6] Food Safety and Technological Advancements - Meituan promoted the "Internet + Bright Kitchen" model, with 117,000 merchants participating, aiming for over 200,000 by 2025 [7] - The company invested 6.3 billion RMB in R&D, a 17.2% increase, and expanded drone delivery services across multiple cities [7] - CFO Chen Shaohui highlighted the resilience of the core local business and the growth potential of new ventures [7]