Group 1: Market Overview - The Hong Kong stock market experienced declines across major indices, with the Hang Seng Index down 0.04%, the Hang Seng China Enterprises Index down 0.23%, and the Hang Seng Tech Index down 0.83% [2] - The total market turnover was HKD 182.48 billion, with short-selling accounting for 16.27% of the total turnover [2] - Northbound capital saw a net inflow of HKD 791 million, with Meituan, Xiaomi, and Agricultural Bank of China being the most actively bought stocks [2] Group 2: Economic Policy Insights - The Central Economic Work Conference outlined key tasks for the upcoming year, emphasizing the importance of domestic demand, economic stability, and reasonable price recovery [4][5] - The conference highlighted the need for a proactive fiscal policy, maintaining necessary fiscal deficits, and optimizing fiscal expenditure structures [4] - Monetary policy will remain moderately loose, focusing on stabilizing economic growth and guiding financial institutions to support key sectors [4] Group 3: Company Analysis - Meituan - Meituan reported a total revenue of RMB 95.5 billion for Q3, a year-on-year increase of 2%, slightly below expectations [7] - The adjusted operating loss was RMB 15.3 billion, with core local business losses significantly higher than expected, reflecting the impact of industry subsidies [7][10] - Despite short-term performance pressures, Meituan's long-term goals for its food delivery business remain unchanged, with a focus on maintaining high-quality orders [10] Group 4: Business Segment Performance - In the food delivery segment, Meituan saw a healthy year-on-year growth in daily orders, although revenue declined due to increased rider and user subsidies [8] - The flash purchase segment experienced strong growth in new user acquisition and order frequency, benefiting from a rich supply [8] - The hotel and travel segment also showed robust growth, with a nearly 20% increase in merchant numbers and user scale [8] Group 5: Financial Forecast and Valuation - The forecast for Q4 indicates a slight decline in core local business revenue, with expectations of reduced losses in the segment [10] - The target price for Meituan has been adjusted to HKD 120, reflecting a valuation based on future earnings and market conditions [10] - The management maintains a target of 100 million high-quality daily orders, indicating confidence in the company's operational efficiency and market position [10]

Group 1: Market Overview - The Hong Kong stock market showed weakness with the Hang Seng Index down 1.29%, the Hang Seng China Enterprises Index down 1.62%, and the Hang Seng Tech Index down 1.9% as of the last trading session [2] - The total market turnover was HKD 210.24 billion, with short selling amounting to HKD 36.64 billion, representing 19.34% of the total turnover [2] - Northbound trading saw a net inflow of HKD 531 million, with Tencent, Xiaomi, and Alibaba being the most actively bought stocks [2] Group 2: Sector Performance - The real estate sector experienced significant declines, with major companies like Agile Group down 18.42% and China Jinmao down 14.6% [3] - The metals and gold sector also faced pressure, with Jiangxi Copper down 6.51% and China Aluminum down 5.69% [4] - The U.S. stock market showed mixed results ahead of the Federal Reserve's meeting, with the S&P 500 slightly down by 0.09% and the Nasdaq up by 0.13% [4] Group 3: Company Analysis - Meituan (3690.HK) - Meituan reported a total revenue of RMB 95.5 billion for Q3, a year-on-year increase of 2%, slightly below expectations [7] - The adjusted operating loss was RMB 15.3 billion, with the core local business segment suffering a loss of RMB 14.1 billion, exceeding consensus estimates by RMB 1.5 billion [7] - Despite short-term performance pressures, Meituan's app daily active users (DAU) increased by 20% year-on-year, indicating strong user engagement [8] Group 4: Business Segment Insights - In the food delivery segment, Meituan saw a healthy growth in daily orders, although revenue declined due to increased rider and user subsidies [8] - The flash purchase segment experienced growth in new user acquisition and order frequency, benefiting from a rich supply [8] - The hotel and travel segment also showed robust growth, with merchant numbers and user scale increasing by nearly 20% year-on-year [8] Group 5: Long-term Outlook - Meituan's overseas business, particularly the Keeta brand, is expected to maintain optimistic long-term potential, with profitability achieved in Hong Kong ahead of schedule [9] - The company anticipates that losses from new business segments will become manageable by 2026, reflecting improved operational efficiency [9] - Financial forecasts suggest a slight decline in core local business revenue for Q4, with an upward adjustment in net loss expectations for 2025 [10]

Investment Rating - The report maintains a "Buy" rating for Meituan [9] Core Insights - In Q3 FY2025, Meituan's revenue reached 954.9 billion CNY, which was below Bloomberg's consensus estimate of 974.7 billion CNY, reflecting a year-on-year growth of 2%. The adjusted net loss was 160.1 billion CNY, exceeding the expected loss of 139.6 billion CNY [6][10] - The report highlights that the competitive pressure in the food delivery sector has peaked, and as subsidies narrow, the focus will shift towards user retention and brand recognition, which are crucial for long-term repurchase rather than new customer acquisition [2][10] - The report projects Meituan's overall revenue for 2025-2027 to be 3,640.67 billion CNY, 4,084.78 billion CNY, and 4,551.56 billion CNY, with adjusted net profits of -115.25 billion CNY, 215.34 billion CNY, and 445.67 billion CNY respectively [2][10] Summary by Sections Overall Performance - Core local business revenue was 674 billion CNY, below the consensus estimate of 692 billion CNY, with an operating loss of 141 billion CNY compared to the expected loss of 126 billion CNY. The operating profit margin was -20.9% [10] - New business revenue was 280 billion CNY, slightly below the expected 286 billion CNY, with a year-on-year operating loss increase of 24.5% to 13 billion CNY [10] Food Delivery and Flash Purchase - The core local business saw a significant operating loss of approximately 191 billion CNY in Q3, with the average order value (AOV) for high-priced orders (above 15 CNY) accounting for two-thirds of the gross transaction value (GTV) [10] - The report emphasizes that user stickiness and brand recognition are essential for the platform's capabilities, and future competition will likely focus on operational efficiency and service quality [10] In-store Dining and Travel - The in-store dining and travel segment contributed approximately 180 billion CNY in revenue, with a year-on-year growth of 12%. The operating profit was 51 billion CNY, with a profit margin of 28% [10] New Business Initiatives - Meituan's new business, Keeta, officially launched operations in Brazil, with expectations of manageable investment levels. The report anticipates that Keeta could contribute significantly to Meituan's GTV in the long term [10]

Group 1: Computer Industry Insights - In 2026, AI is expected to deeply drive the growth of the computer industry, resonating with high-growth sectors such as domestic production, quantum technology, financial IT, and intelligent driving [2] - The rapid iteration of models and high demand for computing power may accelerate commercialization [2] - Industrial software is moving into a "deep water zone," which will support the strategy of becoming a manufacturing powerhouse [2] - These dynamics could jointly promote the industry's dual recovery in performance and valuation [2] Group 2: Debt Market Opportunities - Current divergences in the stock market may create a rare allocation window for the bond market [5] - The yield of ten-year government bonds is suggested to have significant value [5] - The bond market may return to a fundamental pricing logic under the "low interest rate + high volatility" scenario in 2026 [5] Group 3: Deep Sea Technology Outlook - Deep sea technology is projected to release trillion-level opportunities by 2026 [7] - The acceleration of deep-sea mining by the U.S. and its inclusion in China's government work report may reshape the global competitive landscape [7] - There is potential for deep-sea mining to achieve cost parity by 2033, sparking a new wave of equipment investment [7] - Investors are advised to consider short-term FPSO supply chain opportunities and long-term underwater robotics [7] Group 4: Meituan Q3 Performance Review - Meituan's Q3 takeaway business reported a nearly 20 billion loss, raising questions about whether this is the peak [9] - Management's guidance on profitability recovery for Q4 following intense price competition is under scrutiny [9] - The in-store travel business is facing challenges with slowing growth and declining profit margins [9] - The expansion pace and investment efficiency of the new overseas engine, Keeta, in markets like Brazil are being evaluated [9]

Core Viewpoint - The company's 2Q25 revenue and adjusted net profit fell short of market expectations, primarily due to intensified competition in the food delivery sector, leading to increased user subsidies, rider incentives, and advertising expenses [1][2]. Revenue and Profit Analysis - 2Q25 revenue increased by 12% year-on-year to 91.8 billion yuan, but was 2% below market expectations; adjusted net profit was 1.49 billion yuan, significantly lower than expected, with adjusted net profit margin dropping from 16.5% in the same period last year to 1.6% [1]. - Core local business revenue grew by 8% year-on-year to 65.3 billion yuan; however, the food delivery segment's revenue growth was flat due to the impact of subsidies [1][2]. - The company expects a 13% decline in food delivery revenue in 3Q25 due to ongoing competitive pressures and a decrease in average order value (AOV) [1]. Business Segment Performance - The food delivery segment saw a 36% year-on-year increase in order volume in 2Q25, with expectations for continued strong growth in 3Q25 [1]. - The in-store and travel segment experienced over 40% year-on-year growth in order volume, with projected GTV and revenue growth of 27% and 13% respectively in 3Q25 [1]. - New business revenue grew by 23% year-on-year to 26.5 billion yuan in 2Q25, but operating losses widened to 1.8 billion yuan due to increased overseas investments [2]. Profitability Forecast - The core local business operating profit margin (OPM) fell from 25.1% to 5.7% year-on-year, with expectations for further declines in 3Q25 [2]. - The company has revised its adjusted net profit forecast for 2025 from 28.6 billion yuan to a loss of 5.9 billion yuan, and reduced the 2026 profit forecast by 21% to 34.7 billion yuan [2]. - Despite the challenges, the company maintains a positive outlook on the resilience of its food delivery business as the industry shifts focus from market share to profitability [2].

Overall Performance - The company's performance exceeded expectations with Q1 2025 revenue of 86.6 billion CNY, a year-over-year increase of 18%, surpassing Bloomberg's consensus estimate of 85.4 billion CNY [1] - Adjusted operating profit for Q1 2025 was 11.2 billion CNY, exceeding the consensus estimate of 9.9 billion CNY, with an adjusted operating profit margin of 13.0%, up from 9.5% in Q1 2024 [1] - Adjusted net profit reached 10.9 billion CNY, also above the consensus estimate of 9.7 billion CNY, with an adjusted net profit margin of 12.6%, compared to 10.2% in Q1 2024 [1] Core Local Business - Core local business revenue for Q1 2025 was 64.3 billion CNY, a year-over-year increase of 17.8%, exceeding the consensus estimate of 63.5 billion CNY [1] - Adjusted operating profit for this segment was 13.5 billion CNY, surpassing the consensus estimate of 12.2 billion CNY, with an operating profit margin of 21%, reflecting a year-over-year increase of 3.2 percentage points [1] Delivery Business - The delivery segment is expected to see high single-digit growth in order volume, with improved user engagement and frequency of purchases [1] - The company plans to invest 100 billion CNY over the next three years to promote high-quality development in the industry [1] Flash Purchase - Flash purchase orders are projected to grow approximately 30% year-over-year in Q1 2025, with over 500 million transaction users and a 60% increase in non-food orders [2] - The segment is expected to achieve profitability in Q1 2025 due to effective brand advertising and operational efficiencies [2] In-store Travel and Accommodation - The in-store travel and accommodation segment saw a GTV growth of over 30% year-over-year in Q1 2025 [3] - Revenue growth is expected to lag behind GTV growth due to advertising impacts and lower penetration in lower-tier cities [3] New Business - New business revenue reached 22.2 billion CNY in Q1 2025, a year-over-year increase of 19%, aligning with Bloomberg's consensus estimate [4] - The company is actively expanding overseas, with plans to invest 1 billion USD in Brazil over the next five years [4] Valuation and Forecast - The company has adjusted its earnings per share forecasts for 2025-2027 to 6.04, 7.20, and 8.09 CNY respectively, down from previous estimates [4] - The company maintains a target price of 172.90 HKD, with a reasonable valuation of 1,056.4 billion HKD [4]

Core Insights - Meituan achieved operating revenue of 86.6 billion yuan in Q1 2025, a year-on-year increase of 18% [1] - Adjusted net profit reached 10.9 billion yuan, up 46% year-on-year, with an adjusted net profit margin of 13%, an increase of 3 percentage points [1] - The core local business generated revenue of 64.3 billion yuan, also up 18% year-on-year, with an operating profit of 13.5 billion yuan, reflecting a 39% increase [1] Local Business Performance - The restaurant delivery, flash purchase, and in-store travel businesses saw revenue growth of 14%, 33%, and 19% respectively [1] - The average order value (AOV) continued to decline at a reduced rate, while the take rate for restaurant delivery increased due to growth in delivery and advertising revenue [1] - The company plans to increase subsidies in Q2 2025 to address competition, with projected order volume growth of 9% and revenue growth of 5% [1] Flash Purchase Business - Flash purchase order volume grew by 30% year-on-year, with a record high profit margin [2] - Revenue from flash purchase commissions and advertising increased by approximately 33% [2] - The company is expanding its instant delivery network in various product categories and plans to increase subsidies during the 618 shopping festival [2] In-store Business - The in-store travel business's gross transaction value (GTV) grew by 33%, with revenue increasing by 21% year-on-year [3] - The company is focusing on expanding in lower-tier cities and enhancing its membership program to increase transaction frequency [3] - Future membership benefits will cover more categories, aiming to strengthen Meituan's position as a preferred platform for consumers [3] New Business Developments - New business revenue grew by 19% to 22.2 billion yuan, although operating losses increased to 2.3 billion yuan [3] - The company is actively expanding its overseas delivery services, particularly in Saudi Arabia and plans to enter the Brazilian market with a commitment of 1 billion USD over five years [3] Investment Outlook - The company maintains an "outperform the market" rating, with adjusted net profit estimates of 44.7 billion, 58.7 billion, and 71.8 billion yuan for 2025-2027 [4] - Despite increased competition, the company's operational capabilities and compliance improvements are expected to support long-term growth [4] - The valuation is considered attractive compared to the Hang Seng Technology sector, with potential for upward catalysts from dynamic competition [4]

Investment Rating - The investment rating for Meituan-W (03690.HK) is "Outperform the Market" [5] Core Insights - The core local business of Meituan has shown excellent profit release, with a revenue of 86.6 billion yuan in Q1 2025, representing an 18% year-on-year growth. Adjusted net profit reached 10.9 billion yuan, up 46% year-on-year, with an adjusted net profit margin of 13%, an increase of 3 percentage points [1][9][19] - The company is expected to increase subsidies starting Q2 2025 to respond to competition, with projected order volume growth of 9% and revenue growth of 5% in the same period [2][19] - The flash purchase business saw a 30% year-on-year increase in order volume in Q1 2025, with a historical high profit margin, and the company plans to increase subsidies during the 618 shopping festival to expand market reach [3][22] - The in-store business GTV grew by 33% in Q1 2025, with a revenue increase of 21% year-on-year, and the company is actively expanding in lower-tier cities [4][23] - New business revenue grew by 19% year-on-year to 22.2 billion yuan, with a focus on expanding overseas delivery services, particularly in Saudi Arabia and plans to enter the Brazilian market [27] Financial Performance Summary - In Q1 2025, Meituan's core local business achieved a revenue of 64.3 billion yuan, with a year-on-year growth of 18%. The operating profit for this segment was 13.5 billion yuan, reflecting a 39% increase year-on-year and an operating profit margin of 21% [1][17] - The company forecasts adjusted net profits of 44.7 billion yuan, 58.7 billion yuan, and 71.8 billion yuan for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 16.6, 12.6, and 10.3 [7][29] - The adjusted EPS is projected to be 7.14 yuan for 2024, increasing to 9.50 yuan by 2027 [8][32]

Investment Rating - The investment rating for Meituan-W (03690.HK) is "Buy" (maintained) [1] Core Insights - The report indicates that Meituan's Q1 2025 performance exceeded expectations, with total revenue reaching 86.557 billion yuan, a year-on-year increase of 18%. Adjusted net profit was 10.949 billion yuan, outperforming Bloomberg consensus estimates [8] - Core local business profits were better than expected, and the trend of reduced losses in new businesses continued. The core local business revenue for Q1 was 64.3 billion yuan (yoy +17.8%), with an operating profit of 13.5 billion yuan (yoy +39.1%), and the operating profit margin increased by 3 percentage points to 21.0% [8] - The report highlights that while competition may impact Q2 profits, the long-term outlook remains positive due to the company's advantages in fulfillment, supply, and operational efficiency [8] Financial Forecasts - Total revenue projections for Meituan are as follows: - 2023: 276.85 billion yuan - 2024: 337.59 billion yuan (yoy +21.94%) - 2025: 389.69 billion yuan (yoy +15.43%) - 2026: 442.51 billion yuan (yoy +13.55%) - 2027: 494.21 billion yuan (yoy +11.68%) [1] - Adjusted net profit forecasts are: - 2023: 13.86 billion yuan - 2024: 35.81 billion yuan (yoy +158.43%) - 2025: 35.91 billion yuan (yoy +0.28%) - 2026: 46.21 billion yuan (yoy +28.70%) - 2027: 60.46 billion yuan (yoy +30.82%) [1] - The report adjusts the 2025-2027 adjusted profit estimates down to 43.4 billion, 54.1 billion, and 68.4 billion yuan respectively, with corresponding adjusted P/E ratios of 18, 15, and 12 times [8] Business Segments - The core local business is expected to maintain healthy growth, particularly in the food delivery segment, with user engagement and purchase frequency improving. The company plans to invest 100 billion yuan over the next three years to promote high-quality industry development [8] - Instant retail business showed strong growth, with transaction users exceeding 500 million and daily active users peaking at nearly 6.5 million. Non-food category orders grew over 60% year-on-year [8] - The travel and hotel segment is also expected to grow rapidly, especially in lower-tier cities, supported by enhanced membership benefits [8] - The new business segment, particularly the overseas expansion through Keeta, is showing significant progress, with plans to invest 1 billion USD in the Brazilian market over the next five years [8]

Core Insights - Meituan's Q1 revenue and adjusted profit exceeded market expectations, with total revenue reaching 86.6 billion yuan, a year-on-year increase of 18% [1] - The core local business operating profit grew by 39% year-on-year, surpassing market expectations by 10% [1] - The company reported record high annual active users and merchants, indicating strong market presence [1] Financial Performance - Q1 total revenue was 86.6 billion yuan, slightly above market expectations by 1.4% [1] - Adjusted net profit for Q1 was 10.9 billion yuan, a 46% year-on-year increase, exceeding market expectations by 18% [1] - Core local business revenue increased by 18% year-on-year, with operating profit margin improving by 3 percentage points to 21% [1][2] Business Segments - Delivery, commission, and online marketing revenues grew by 22%, 20%, and 15% year-on-year, respectively [2] - The food delivery segment saw an increase in user order frequency, with daily order volume growth estimated at around 10% [2] - Instant retail and travel segments also showed strong growth, with non-food orders in instant retail increasing over 60% year-on-year [2] Competitive Landscape - Management emphasized commitment to compete effectively, planning to invest 100 billion yuan over the next three years to enhance supply chain and merchant digital transformation [2] - Despite competitive pressures, Meituan's food delivery segment maintained steady growth in daily order volume [2] Financial Forecast and Valuation - For Q2, total revenue is expected to grow by 13%, with core local business and new business revenues projected to increase by 10% and 21%, respectively [3] - The company anticipates a 15% year-on-year increase in total revenue for 2025, with adjustments made to core local business profit forecasts [3] - The valuation for core local business is set at 18 times the 2025 operating profit, with a target price adjustment to 177 HKD, indicating a potential upside of 34% from recent closing prices [3]