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]

Core Viewpoint - In Q1 2025, Meituan achieved total revenue of 86.557 billion yuan, a year-on-year increase of 18.1%, and a Non-GAAP net profit of 10.949 billion yuan, up 46.2%, exceeding Bloomberg consensus expectations [1] Financial Performance - Meituan's core local commerce revenue reached 64.325 billion yuan in Q1, growing 17.76% year-on-year, with adjusted operating profit of 13.5 billion yuan, up 39.10% [1] - Delivery service revenue was 25.7 billion yuan, a 22.11% increase year-on-year, while commission revenue was 24.1 billion yuan, up 20.05% [1] - Online marketing service revenue was 11.9 billion yuan, growing 15.09% year-on-year [1] Market Competition - Increased competition in the delivery market, particularly from JD.com, is expected to impact Meituan's profits starting in Q2, with revenue growth anticipated to slow [1] - The long-term view suggests that irrational competition in the industry may not be sustainable, with Meituan's delivery business having higher barriers compared to in-store travel and dining [1] New Business Developments - Meituan's new business segment reported revenue of 22.2 billion yuan in Q1, a 19% year-on-year increase, but incurred an adjusted operating loss of 2.3 billion yuan, slightly widening due to increased investment in Keeta in the Middle East [2] - The long-term outlook for Keeta is positive, with potential for significant profit margins in overseas markets, particularly in Brazil [2] Profit Forecast and Valuation - Meituan's projected revenues for FY25 and FY26 are 388.997 billion yuan and 456.662 billion yuan, with growth rates of 15.23% and 17.39% respectively [2] - Non-GAAP profits are expected to be 40.986 billion yuan and 52.824 billion yuan, reflecting a year-on-year decline of 6.37% and an increase of 28.88% [2] - The company maintains a "buy" rating with a target price of 146.33 HKD, corresponding to a 20X PE for 2025 [2]