Meituan (3690.HK) 3Q25 Earnings Call Summary Company Overview - **Company**: Meituan (3690.HK) - **Industry**: E-commerce and local services in China Key Financial Highlights - **Adjusted Operating Loss**: Rmb -17.5 billion, better than Goldman Sachs estimate (GSe) of Rmb -18.8 billion [1] - **Core Local Commerce (CLC) Loss**: Rmb -14.1 billion, above GSe of Rmb -15.1 billion but below Visible Alpha consensus of Rmb -13.1 billion [1] - **New Initiatives Loss**: Rmb -1.3 billion, better than both GSe and Visible Alpha consensus (GSe: Rmb -2.3 billion) [1] - **3Q25 Net Revenue**: Rmb 95.488 billion, a 2% increase year-over-year [16] - **Adjusted EBITDA**: Rmb -14.842 billion, a decline of 202% year-over-year [16] Competitive Landscape - **Food Delivery Competition**: Intensity has decreased post-Singles' Day festival, with Meituan regaining market share [8] - **Long-term Competition Outlook**: Expected to shift from capital-driven to efficiency-driven, focusing on high-quality orders and fast delivery [8] - **Instashopping Losses**: Anticipated to widen in 4Q due to increased investment in user experience and supply-side operations [9] Segment Performance - **Core Local Commerce**: Revenue declined by 3% year-over-year, with a significant loss in adjusted EBIT margin [19] - **Food Delivery**: Estimated losses of Rmb -20 billion, compared to Alibaba's Rmb -36 billion [7] - **In-store, Hotel & Travel (IHT)**: EBIT margin fell to around 28%, with growth moderating to high-teens percentage [7] - **New Initiatives**: Revenue growth of 16% to Rmb 28.0 billion, driven by grocery retail and overseas expansion [7] Technology and AI Initiatives - **AI Strategies**: Development of AI models and chatbots to enhance user experience and support local services [11] International Expansion - **Keeta**: Achieved profitability in Hong Kong ahead of schedule, with plans to expand into the Middle East and Brazil [12] Future Outlook - **4Q25 Expectations**: Anticipated narrowing of losses, with a focus on improving average order value (AOV) and managing competition [19] - **Long-term Growth Drivers**: Expected recovery in profits over 2026-27, supported by AI applications and new market entries [14] Risks - **Key Risks Identified**: Increased competition, labor cost inflation, and food safety concerns [15] Investment Recommendation - **Rating**: Buy with a 12-month price target of HK$139, indicating a potential upside of 35.6% from the current price of HK$102.50 [19]