2025-09-08 04:11Summary of Meituan's Conference Call Company Overview - Company: Meituan (3690.HK) - Event: Asia Leaders Conference 2025 - Date: September 5, 2025 - Focus: Food delivery competitive landscape, Instashopping growth, AI strategies, and financial outlook Key Points Industry and Competitive Landscape - Food Delivery Competition: Increased competition since June-July has significantly impacted unit economics due to elevated subsidy levels and higher delivery costs [5][7] - Market Share Strategy: Meituan aims to maintain its GTV market share leadership in the meal category by focusing on core users and leveraging extensive merchant coverage and superior user experiences [5][7] - Order Volume Growth: Goldman Sachs forecasts 13% and 11% order volume growth for 3Q25 and FY25E, respectively, driven by elevated industry-wide subsidies [5][7] Financial Performance and Projections - EBIT Loss Forecast: For 2025E, Meituan is expected to incur a food delivery EBIT loss of -Rmb22 billion due to user subsidies [5][7] - Instashopping Growth: Instashopping's order volume is projected to grow by 31% in 2025E, with an EBIT loss of -Rmb1.7 billion attributed to investments [6][7] - Revenue Growth: Meituan's group revenue is projected to reach Rmb337.6 billion in 2024, with a growth rate of 23% [9][11] Strategic Initiatives - AI and New Initiatives: The company is investing in AI applications and expanding its Keeta initiative, which is expected to drive new growth [7][8] - Overseas Expansion: Meituan is prioritizing domestic market resources but continues to develop overseas business, particularly in Hong Kong and the Middle East [8][9] Risks and Challenges - Downside Risks: Key risks include worse-than-expected competition, labor cost inflation, food safety concerns, and larger-than-expected investments in Keeta [8][9] - In-store Competition: The in-store segment is facing margin pressures due to macro factors and competition from food delivery services [8][9] Investment Outlook - Rating and Price Target: Goldman Sachs maintains a Buy rating on Meituan with a 12-month price target of HK$144, indicating a potential upside of 39.8% from the current price of HK$103 [11][12] Additional Insights - Long-term Confidence: Despite near-term profit pressures, there is confidence in Meituan's leadership in local services and recovery in profitability as competition normalizes [7][8] - Market Position: Meituan's strong balance sheet and leading position in GTV are seen as advantages in navigating the competitive landscape [7][8] This summary encapsulates the critical insights from Meituan's conference call, highlighting the company's strategic focus, financial outlook, and the competitive environment in which it operates.