Group 1: Financial Performance - For 3Q25E, Meituan is estimated to achieve revenue of RMB97.8 billion, reflecting a 4.6% year-over-year growth, but an adjusted net loss of RMB16.6 billion is expected, which is higher than the consensus of RMB12.6 billion due to intense competition in the food delivery sector [1] - The food delivery business is anticipated to incur an operating loss of RMB20.6 billion in 3Q25E, a significant decline from an operating profit of RMB9 billion in 3Q24, leading to a revised overall operating profit forecast for the core local commerce (CLC) business to -RMB15.5 billion [2] - For 4Q25E, a group-level adjusted net loss of RMB8.3 billion is expected, which is an improvement from 3Q25E but still higher than the consensus loss of RMB5.8 billion [2] Group 2: Competitive Landscape - The impact of incremental investment on operating profit from the food delivery business is believed to have peaked in 3Q25, but the competitive environment's pace of improvement remains a critical factor to monitor [1][2] - Despite the current challenges, there is optimism that industry competition will return to rationality over time, allowing Meituan to maintain its leading position in quality food delivery orders [1] Group 3: New Initiatives and Forecast Revisions - Revenue growth for new initiatives is forecasted at 17.5% year-over-year with an operating loss of RMB2.35 billion in 3Q25E, with strategic transformations expected to reduce losses in Meituan Select in the second half of 2025 [3] - Key changes in forecasts include a 0-4% increase in 2025-2027E revenue estimates due to better-than-expected growth from international expansion, while operating profit forecasts for 2025E and 2026E have been cut to losses of RMB17.2 billion and RMB1.9 billion, respectively, due to intensified competition in the food delivery sector [4]

Core Insights - The article discusses the transformation of traditional lifestyles and consumption patterns among middle-aged women in a village in Hunan, who have taken on the role of community group buying leaders, referred to as "slash aunties" [2][3][4] - The shift from competition to a more relaxed approach among these group leaders is highlighted, particularly after many platforms withdrew from the market, leading to a decrease in earnings and increased complexities in their roles [2][15][16] Group 1: Community Group Buying Dynamics - The village has ten group leaders, predominantly women over 45, who juggle multiple roles including running small businesses [3][4] - The initial enthusiasm for group buying led to a surge in the number of group leaders during the "Battle of the Hundreds of Groups," but many platforms have since exited the market, leaving the remaining leaders to adapt to new realities [4][15] - The article emphasizes the importance of personal relationships and community ties in the success of these group leaders, as they often rely on their social networks for business [10][22] Group 2: Individual Experiences and Challenges - Individual stories of group leaders like Wu Chunfang illustrate their proactive approach to delivering goods and maintaining customer relationships, often going above and beyond to meet community needs [6][10][20] - The article notes that while some group leaders initially sought to supplement their income, many now view their roles as secondary to their primary occupations, with earnings often seen as "pocket money" [18][19] - The challenges faced by these leaders include managing customer expectations and navigating the complexities of platform rules, which often conflict with local customs and relationships [11][16][22] Group 3: Economic Impact and Future Outlook - The community group buying model has altered consumption habits, with villagers purchasing a wide range of products beyond just groceries, indicating a shift in local economic dynamics [15][18] - The article suggests that while some group leaders have expressed a desire to exit the business due to declining profits, others like Wu Chunfang have solidified their roles within the community, becoming integral to local life [22][23] - The ongoing evolution of this model reflects broader trends in rural consumption and the adaptation of traditional roles in response to modern economic pressures [2][15][22]

Core Insights - The company reported a significant decline in adjusted profit for Q2 2025, with adjusted profit down 89% year-on-year, reflecting challenges in profitability amidst increased competition and operational costs [1][3] - Core local business remains the primary revenue source, with revenue of 653.5 billion yuan in Q2 2025, showing a year-on-year increase of 7.7%, but operating profit decreased by 75.6% [2][3] - New business revenue grew by 22.8% year-on-year to 264.9 billion yuan, but the operating loss was 18.8 billion yuan, indicating ongoing challenges in achieving profitability [3] Financial Performance - In Q2 2025, the company achieved total revenue of 918.4 billion yuan, a year-on-year increase of 11.7%, but operating profit was only 2.3 billion yuan, down 98% [1] - The adjusted net profit margin was 1.6%, down 14.9 percentage points year-on-year, highlighting pressure on profitability [1][3] - The core local business's operating profit margin was 5.7%, down 19.4 percentage points, indicating a significant decline in profitability [2] Business Segments - The delivery service segment saw revenue of 237 billion yuan, with a growth rate of 2.8%, while the commission and online marketing segments grew by 12.9% and 10.5%, respectively [2] - The takeout business is expected to see double-digit growth in order volume, but average order value (AOV) is projected to decline slightly, leading to low single-digit revenue growth [2] - The company plans to exit underperforming areas in its new business and focus on expanding its core regions, particularly through the small elephant supermarket initiative [3] Future Outlook - The company anticipates significant losses in the core local business in Q3 2025 due to intensified competition and increased strategic investments [3] - Adjusted net profit forecasts for 2025-2027 have been revised downwards, with expected losses of 77 billion yuan in 2025, followed by profits of 318 billion yuan and 466 billion yuan in 2026 and 2027, respectively [4] - The company maintains a medium-term rating of "outperform" against the market, while closely monitoring competitive dynamics in the industry [4]

Core Viewpoint - The company reported a significant decline in adjusted net profit and gross margin due to intense competition in the instant retail sector, while new business revenues continue to grow but are impacted by overseas expansion losses [1][2][3] Financial Performance - In Q2 2025, the company achieved revenue of 91.84 billion yuan, a year-over-year increase of 11.7% and a quarter-over-quarter increase of 6.1% [1] - The gross margin was 33.1%, down from 41.2% in the same period last year [2] - Adjusted net profit was 1.49 billion yuan, representing a year-over-year decrease of 89.0% [1][2] - The adjusted profit margin was 1.6%, down 14.9 percentage points year-over-year and 11 percentage points quarter-over-quarter [1][2] Business Segments - Core local business revenue reached 65.35 billion yuan, up 7.7% year-over-year, with delivery revenue at 23.66 billion yuan (up 2.8% year-over-year) and commission revenue at 24.95 billion yuan (up 12.9% year-over-year) [1] - New business revenue was 26.49 billion yuan, a year-over-year increase of 22.8%, but incurred a loss of 1.88 billion yuan due to overseas expansion [1][3] Competitive Landscape - Intense competition in instant retail is squeezing the company's profits, with significant increases in delivery subsidies, rider costs, and user subsidies [2] - The company’s operating profit is under pressure due to the competitive landscape, which is influenced by competitors' strategies [2] Growth Prospects - The company is expanding its new business segments, with strong growth in instant retail and plans for further expansion in both domestic and international markets [3] - The company has established over 50,000 flash warehouses nationwide and is exploring new delivery models [3] Investment Outlook - Revenue forecasts for 2025-2027 have been adjusted to 374 billion, 427.7 billion, and 489.5 billion yuan respectively, with a projected net profit of -10.2 billion, 15.8 billion, and 38.5 billion yuan [3] - The target market capitalization for 2025 is set at 712.9 billion yuan, with a target price of 127.93 HKD [3]

Investment Rating - The report maintains a "Recommendation" rating for Meituan-W (03690.HK) [1] Core Views - The company reported Q2 2025 earnings with revenue of 91.84 billion yuan, a year-on-year increase of 11.7% and a quarter-on-quarter increase of 6.1%. However, the gross margin decreased to 33.1% from 41.2% in the same period last year, and the adjusted net profit was 1.49 billion yuan, down 89.0% year-on-year [1][4] - The intense competition in instant retail is suppressing profits, and the recovery of profitability in the short term needs to be observed in terms of competitive dynamics and new business developments [1][4] - The core local business revenue reached 65.35 billion yuan, up 7.7% year-on-year, while new business revenue grew by 22.8% to 26.49 billion yuan, driven by grocery retail and overseas expansion [1][4] Financial Summary - Total revenue projections for 2024A, 2025E, 2026E, and 2027E are 337.59 billion yuan, 373.99 billion yuan, 427.68 billion yuan, and 489.47 billion yuan respectively, with year-on-year growth rates of 22.0%, 10.8%, 14.4%, and 14.4% [3] - Adjusted net profit forecasts for the same years are 43.77 billion yuan, -10.21 billion yuan, 15.78 billion yuan, and 38.55 billion yuan, with year-on-year growth rates of 88.2%, -123.3%, 254.6%, and 144.3% [3] - The target price for the stock is set at 127.93 HKD, with the current price at 96.55 HKD, indicating a potential upside [4]

Investment Rating - The investment rating for Meituan-W (03690.HK) is "Outperform the Market" [6][25]. Core Views - The report indicates that increased subsidies have negatively impacted operational performance, with a significant decline in adjusted profit by 89% year-on-year for Q2 2025. Revenue reached 91.84 billion yuan, up 11.7% year-on-year, but operating profit fell to 230 million yuan, down 98% [1][8]. - The core local commerce segment remains the primary source of profit, generating 65.35 billion yuan in revenue, a 7.7% increase year-on-year. However, operating profit in this segment dropped by 75.6% [2][11]. - New business losses have narrowed sequentially, with revenue of 26.49 billion yuan, up 22.8% year-on-year, and an operating loss of 1.88 billion yuan, showing improvement from previous quarters [3][12]. Summary by Sections Financial Performance - In Q2 2025, adjusted profit decreased by 89% to 1.49 billion yuan, with an adjusted net profit margin of 1.6%, down 14.9 percentage points year-on-year [1][8]. - The core local commerce segment's revenue was 65.35 billion yuan, with a significant decline in operating profit margin to 5.7%, down 19.4 percentage points year-on-year [2][11]. - New business revenue reached 26.49 billion yuan, with a narrowed operating loss of 1.88 billion yuan, improving from previous quarters [3][12]. Revenue Projections - Revenue projections for 2025-2027 are as follows: 370.34 billion yuan in 2025, 423.48 billion yuan in 2026, and 485.09 billion yuan in 2027, with respective year-on-year growth rates of 9.7%, 14.3%, and 14.5% [5][22]. - Adjusted net profit forecasts for the same period are -7.71 billion yuan in 2025, 31.76 billion yuan in 2026, and 46.57 billion yuan in 2027 [5][22]. Market Dynamics - The report highlights that the competitive landscape is intensifying, leading to increased strategic investments by the company to maintain market leadership and brand recognition [3][20]. - The company plans to focus on core areas and expand its supermarket business while exiting underperforming regions [3][12].

Investment Rating - The report maintains an "Outperform" rating for Meituan-W (03690.HK) [6] Core Views - The company's adjusted profit for Q2 2025 decreased by 89%, with revenue reaching 91.84 billion yuan, a year-on-year increase of 11.7% [8] - The core local commerce segment remains the primary source of profit, with revenue of 65.35 billion yuan in Q2 2025, reflecting a year-on-year growth of 7.7% [2] - Increased subsidies have negatively impacted revenue growth, particularly in the delivery service segment, which saw a decline in growth rates [2][11] - New business losses have narrowed sequentially, with revenue of 26.49 billion yuan in Q2 2025, up 22.8% year-on-year [12] Summary by Sections Financial Performance - In Q2 2025, the company reported an operating profit of 230 million yuan, down 98% year-on-year, with an operating margin of 0.2%, a decrease of 13.4 percentage points [8] - The adjusted net profit margin was 1.6%, down 14.9 percentage points year-on-year [17] Core Local Commerce - Revenue from core local commerce was 65.35 billion yuan, with delivery services, commissions, online marketing, and other services contributing 23.66 billion, 24.95 billion, 13.55 billion, and 3.19 billion yuan respectively [11] - The operating profit for this segment was 3.72 billion yuan, down 75.6% year-on-year, with an operating margin of 5.7%, a decrease of 19.4 percentage points [11] New Business Developments - New business revenue reached 26.49 billion yuan, with an operating loss of 1.88 billion yuan, improving by 3.1 percentage points sequentially [12] - The company plans to focus on core areas and accelerate the expansion of its supermarket business, aiming to cover all first- and second-tier cities in China [12] Future Outlook - The company expects significant losses in the core local commerce segment in Q3 2025 due to increased strategic investments and competitive pressures [20] - Adjusted net profit forecasts for 2025-2027 have been revised to -7.7 billion, 31.76 billion, and 46.57 billion yuan respectively, reflecting a downward adjustment of -117%, -46%, and -35% [20][21]

Investment Rating - The report maintains a "Buy" rating for Meituan, with a target price adjusted to HKD 120, indicating a potential upside of 17% from the current price of HKD 102.7 [4][7][20]. Core Views - The report highlights that Meituan's revenue for Q2 2025 grew by 11.7% year-on-year to RMB 91.8 billion, which was below market expectations by 2.0%. The gross margin decreased by 8.1 percentage points to 33.1% due to increased rider subsidies and overseas business costs [2][3]. - The competitive landscape in the food delivery industry remains intense, with expectations of increased losses in Q3 2025. The core local business revenue grew by 7.7% year-on-year, significantly lower than market expectations, and operating profit dropped by 76% to RMB 3.7 billion [3]. - Meituan is focusing on enhancing its user experience (UE) and operational efficiency, which is expected to strengthen its competitive position despite the ongoing market challenges. The report anticipates that losses will improve in Q4 2025 as industry subsidies decrease [3][4]. Financial Summary - For FY25E, the report projects revenue of RMB 368.1 billion and a net profit loss of RMB 12.8 billion. The adjusted net profit is expected to be RMB -7.2 billion, with a significant recovery anticipated in FY26E [6][11]. - The report provides a detailed financial forecast, indicating a revenue increase to RMB 469.7 billion by FY27E, with a gradual recovery in operating profit and net profit margins over the forecast period [6][11]. Business Strategy - Meituan is strategically shifting its focus from underperforming segments like Meituan Youxuan to other new retail businesses, while also expanding its international presence through Keeta, which has shown strong growth in order volume and transaction value [4][3]. - The report emphasizes the importance of maintaining competitive pricing and high-quality product offerings to cater to diverse consumer needs, which is crucial for sustaining market share in a highly competitive environment [3][4].

Core Viewpoint - The article discusses the competitive landscape of Meituan, particularly in the food delivery sector, highlighting the company's financial performance and strategic adjustments in response to intense competition [2][6][20]. Financial Performance - In Q2, Meituan reported revenue of 918 billion RMB, a year-on-year increase of 11.7%. The core local commerce segment saw revenue growth of 7.7% to 653 billion RMB, but operating profit plummeted by 75.6% to 37 billion RMB, with a significant decline in operating profit margin [2][3]. - The adjusted EBITDA for the quarter was 2.78 billion RMB, reflecting an 81.5% year-on-year decrease, indicating substantial pressure on profitability due to increased competition and costs [3][8]. Competitive Landscape - The article emphasizes the impact of subsidy wars on Meituan's performance, noting that while user engagement increased, the average order value (AOV) declined, leading to a mismatch between revenue growth and order volume [7][8]. - Meituan's management has expressed a commitment to focusing on fundamental aspects of the business, such as supply, delivery service, and pricing, to navigate the competitive environment effectively [6][20]. Strategic Adjustments - Meituan has restructured its new business segments, particularly by exiting poorly performing areas in its grocery retail division and concentrating resources on the more promising Xiaoxiang Supermarket [4][18]. - The new business segment reported a revenue increase of 22.8% year-on-year, driven by the expansion of Xiaoxiang Supermarket and overseas operations, although it still faced significant operating losses [5][18]. Long-term Vision - Meituan's management has reiterated its long-term growth strategy, aiming for sustainable profitability rather than short-term gains through unsustainable subsidies. The focus is on enhancing operational efficiency and building a robust ecosystem [9][20]. - The company has set ambitious goals for its overseas business, Keeta, aiming for an annual GMV of 100 billion USD by 2033, indicating a strong commitment to international expansion [19]. Innovations and New Initiatives - Meituan is actively pursuing supply-side innovations, such as the "Raccoon Canteen" model, which aims to streamline operations for merchants and improve service quality [11]. - The company is also expanding its instant retail business, Meituan Flash Purchase, which has seen significant growth and is positioned to compete with traditional e-commerce platforms [14][20].

Core Insights - The second quarter marked the true beginning of the "takeout war," with Meituan's performance under scrutiny amid fierce competition [1] - Meituan's revenue reached 91.84 billion RMB, a year-on-year increase of 11.7%, but the core local business segment saw a significant decline in operating profit [2][3] - The company is focusing on long-term growth strategies despite short-term pressures from competition and increased costs [5][18] Financial Performance - Revenue for the second quarter was 91.84 billion RMB, up 11.7% from the previous year [2] - Operating profit dropped by 98% to 226.35 million RMB, with a significant decline in profit margins [2] - Sales costs increased by 27% to 61.4 billion RMB, driven by higher rider subsidies and marketing expenses [7] Business Adjustments - Meituan has restructured its new business segments, focusing resources on the more promising "Xiaoxiang Supermarket" and reducing losses from the poorly performing "Meituan Youxuan" [3][4] - The new business segment's revenue grew by 22.8% year-on-year, primarily due to the expansion of Xiaoxiang Supermarket and overseas operations [4] Competitive Landscape - The intense competition has led to a surge in user engagement, with monthly active users surpassing 500 million and daily order volumes reaching a record high of 150 million [5][12] - Despite the increase in order volume, the average order value (AOV) has declined, indicating a mismatch between demand stimulation and revenue generation [6] Strategic Focus - Meituan's management emphasizes a return to fundamental business principles: supply, delivery service, and pricing [5][18] - The company is committed to sustainable investments that enhance long-term capabilities rather than engaging in unsustainable spending [8][17] Innovations and Future Plans - Meituan is expanding its "Brand Satellite Store" initiative, aiming to open over 10,000 stores by the end of the year [8] - The "Raccoon Canteen" model is being developed to streamline operations for merchants, with a target of 1,200 locations in three years [11] - The company aims to achieve a daily order volume of 1 billion by 2025, with a profit target of 1 RMB per order [12][17]