Investment Rating - The report maintains a "Strong Buy" rating for Meituan-W (03690.HK) [1][3] Core Views - The Q2 performance of Meituan was impacted by increased competition, with revenue of 91.84 billion (+11.7%) and adjusted net profit of 1.49 billion (-89.0%) [1][6] - Despite the competitive pressures, the long-term outlook for the company's core domestic business remains positive due to its competitive advantages and growth potential, while overseas operations present new growth opportunities [1][6] Financial Data and Valuation - Revenue projections for the upcoming years are as follows: - 2023: 276.85 billion - 2024: 337.59 billion - 2025E: 370.60 billion - 2026E: 428.95 billion - 2027E: 493.90 billion - Adjusted net profit estimates show significant fluctuations, with a projected loss of 15.60 billion in 2025E, followed by a recovery in subsequent years [2][8] - The target price is set at 141.90 HKD, with the current stock price at 116.3 HKD, indicating potential upside [3][6] Business Segment Performance - Core local commerce revenue growth slowed to 7.7% in Q2, while new business revenue increased by 22.8% [6] - The food delivery segment experienced stable growth in order volume, but profitability was affected by increased competition and subsidies [6] - The in-store segment showed a GTV growth of over 20%, but revenue growth is expected to decline due to competitive pressures [6] Future Outlook - The report anticipates that Q3 will see continued competitive intensity, leading to increased losses in the food delivery segment [6] - Long-term growth potential remains strong, with expectations for core local business GMV to reach approximately 2.7 trillion in 2025E [6][7]

Core Financial Performance - Meituan reported Q2 2025 revenue of 91.8 billion yuan, a year-on-year increase of 11.7% [1] - Net profit for Q2 2025 was 365.3 million yuan, down from 11.4 billion yuan in the same period of 2024; adjusted net profit was 1.5 billion yuan, compared to 13.6 billion yuan in 2024 [1] Core Local Business - Revenue from Meituan's core local business segment grew by 7.7% year-on-year to 65.3 billion yuan [2] - Operating profit for this segment decreased by 75.6% year-on-year to 3.7 billion yuan, with an operating margin decline of 19.4 percentage points to 5.7% [2] New Business Segment - Revenue from Meituan's new business segment increased by 22.8% year-on-year to 26.5 billion yuan [2] - Operating loss for this segment widened by 43.1% year-on-year to 1.9 billion yuan, although the operating loss margin improved by 3.1 percentage points to 7.1% [2] Other Income - Other net income for Q2 2025 was 808 million yuan, compared to 630.6 million yuan in the same period of 2024; this change was primarily due to a shift from foreign exchange losses to gains, partially offset by a decrease in fair value changes and income from investment products [3]

Core Insights - Meituan's Q1 2025 financial results exceeded expectations, with revenue of 86.56 billion (+18.1%), operating profit of 10.57 billion (+102.8%), and adjusted net profit of 10.95 billion (+46.2%) [1] - The company maintains a strong outlook on its domestic core business barriers and growth potential, while also exploring new growth opportunities in overseas markets [1][3] Revenue Growth and Core Business Performance - Q1 revenue growth was driven by the local commerce segment, which generated 64.32 billion (+17.8%) in revenue and an operating profit of 13.49 billion (+39.1%) [1] - New business revenue reached 22.23 billion (+19.2%), although it reported an operating loss of 2.27 billion [1] Delivery and Flash Purchase Insights - In Q1, the average daily order volume for food delivery showed steady growth, supported by improved advertising monetization and subsidy efficiency, leading to a significant increase in operating profit margin (OPM) [2] - Flash purchase segment maintained rapid growth in order volume, achieving an OPM of approximately 10% driven by advertising and subsidy improvements [2] Store and Offline Business Performance - The in-store segment saw a revenue increase to approximately 15.1 billion (+20%), with a stable OPM, driven by growth in various new scenarios [2] - Q2 expectations indicate a slight slowdown in growth for the in-store segment due to competition and seasonal factors [2] New Business Expansion - Keeta is set to enter the Brazilian market, with plans to invest 1 billion USD over the next five years following a strategic cooperation agreement [3] - Despite the anticipated growth in new business revenue driven by Keeta, overall losses are expected to widen [3] Investment Recommendations - The company is projected to achieve a core business operating profit of 53.2 billion for 2025, with an estimated net profit of 45.3 billion, leading to a target price of 156 HKD based on a 20x PE ratio [3]

Investment Rating - The report maintains a "Strong Buy" rating for Meituan-W (03690.HK) [1][3] Core Insights - Meituan's Q1 2025 revenue reached 86.56 billion, representing an 18.1% year-on-year growth, with operating profit at 10.57 billion, up 102.8%, and adjusted net profit at 10.95 billion, increasing by 46.2% [1][6] - The report expresses long-term optimism regarding the company's domestic core business barriers and growth potential, alongside new growth opportunities from overseas expansion [1][6] Financial Performance Summary - **Revenue Forecasts**: - 2023: 276.85 billion - 2024: 337.59 billion - 2025E: 390.78 billion - 2026E: 451.15 billion - 2027E: 513.08 billion - Year-on-year growth rates: 26%, 22%, 16%, 15%, 14% [2][9] - **Adjusted Net Profit**: - 2023: 23.25 billion - 2024: 43.77 billion - 2025E: 42.79 billion - 2026E: 56.37 billion - 2027E: 70.15 billion - Year-on-year growth rates: 709%, 88%, -2%, 32%, 24% [2][11] - **Earnings Per Share (EPS)**: - 2023: 3.79 - 2024: 7.13 - 2025E: 6.97 - 2026E: 9.19 - 2027E: 11.43 [2][11] - **Valuation Ratios**: - P/E (adjusted): 40.8 for 2023, decreasing to 13.5 by 2027 - P/B: 4.9 for 2023, decreasing to 2.3 by 2027 [2][10] Business Segment Performance - **Core Local Business**: - Q1 revenue of 64.32 billion, up 17.8%, with operating profit of 13.49 billion, up 39.1% [6] - **New Business**: - Q1 revenue of 22.23 billion, up 19.2%, with an operating loss of 2.27 billion [6] - **Delivery & Flash Purchase**: - Q1 delivery volume growth remained stable, with operating profit margin (OPM) showing significant improvement [6] - **In-store Services**: - Q1 revenue of approximately 15.1 billion, up 20%, with stable OPM [6] Market Outlook - The report anticipates that while Q2 may see short-term competitive impacts on delivery services, the long-term effects on market share and user experience (UE) will be limited [6] - The company is expected to continue exploring overseas markets, with plans for Keeta to enter Brazil, backed by a strategic partnership and a planned investment of 1 billion USD over five years [6]

Investment Rating - The report maintains a "Strong Buy" rating for Meituan-W (03690.HK) [1][3] Core Insights - Meituan's Q1 2025 revenue reached 86.56 billion, representing an 18.1% year-on-year growth, with operating profit at 10.57 billion, up 102.8%, and adjusted net profit at 10.95 billion, increasing by 46.2% [1][6] - The report expresses long-term optimism regarding the company's domestic core business barriers and growth potential, alongside new growth opportunities from overseas expansion [1][6] Financial Performance Summary - **Revenue Forecasts**: - 2023: 276.85 billion - 2024: 337.59 billion - 2025E: 390.78 billion - 2026E: 451.15 billion - 2027E: 513.08 billion - Year-on-year growth rates are projected at 26%, 22%, 16%, 15%, and 14% respectively [2][9] - **Adjusted Net Profit**: - 2023: 23.25 billion - 2024: 43.77 billion - 2025E: 42.79 billion - 2026E: 56.37 billion - 2027E: 70.15 billion - Notable growth of 709% in 2023, followed by 88% in 2024, with a slight decline of 2% expected in 2025 [2][11] - **Earnings Per Share (EPS)**: - 2023: 3.79 - 2024: 7.13 - 2025E: 6.97 - 2026E: 9.19 - 2027E: 11.43 [2][11] - **Valuation Ratios**: - P/E (adjusted): 40.8 in 2023, decreasing to 13.5 by 2027 - P/B: 4.9 in 2023, decreasing to 2.3 by 2027 [2][10] Business Segment Performance - **Core Local Business**: - Q1 revenue of 64.32 billion, up 17.8%, with operating profit of 13.49 billion, a 39.1% increase [6] - **New Business**: - Q1 revenue of 22.23 billion, up 19.2%, with an operating loss of 2.27 billion [6] - **Delivery and Flash Purchase**: - Q1 delivery volume growth remained stable despite competitive pressures, with a projected increase in Q2 [6] - **International Expansion**: - Keeta is set to enter the Brazilian market, with a planned investment of 1 billion USD over five years [6]