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 Key Industry Insights - Food Delivery Landscape: - Increased competition since June-July has significantly impacted unit economics due to elevated subsidy levels and higher delivery costs [5] - Meituan aims to maintain its GTV market share leadership in the meal category, focusing on core users and confident in long-term unit economics once competition normalizes [5] - Goldman Sachs forecasts 13% order volume growth for 3Q25 and 11% for FY25E, but expects a material decline in food delivery unit economics due to increased subsidies [5] - Instashopping Growth: - Meituan's on-demand retail models include both 3P (Instashopping) and 1P (Xiaoxiang Supermarket) models, facing intensified competition since 3Q25 [5] - Instashopping order volume is expected to grow by 33% for 3Q25E, with an operating loss of -Rmb1.5 billion due to investments aimed at improving user engagement [6] - For 2025E, Instashopping volume growth is estimated at 31%, with an EBIT loss of -Rmb1.7 billion [6] - In-store Competition & Margins: - The competitive landscape remains stable, but near-term EBIT margins have been affected by macro factors and increased competition in food delivery [8] - Goldman Sachs projects 3Q25E IHT revenue growth of 13% YoY, with lower margins due to ongoing investments [8] Financial Projections - Revenue and Profitability: - Group revenue is projected to reach Rmb 337.6 billion in 2024, with a gross profit of Rmb 129.8 billion [9] - Adjusted EBIT is expected to be Rmb 16.1 billion in 2024, with a significant EBIT loss of -Rmb 22 billion in food delivery for 2025E [9] - The company anticipates a recovery in profitability by 2026-27E as competition normalizes [7] - Market Capitalization and Price Target: - Current market cap is HK$642.5 billion, with a price target of HK$144, indicating a potential upside of 39.8% from the current price of HK$103 [11] Strategic Initiatives - AI and New Initiatives: - Meituan is focusing on AI applications and the expansion of Keeta, which are expected to drive new growth [7] - The company is prioritizing domestic market resources while continuing overseas expansion, particularly in Hong Kong and the Middle East [8] Risks and Challenges - Key Risks: - Potential for worse-than-expected competition impacting growth and profit turnaround [8] - Labor cost inflation and food safety concerns could pose additional challenges [8] - Larger-than-expected investments in Keeta may also affect financial performance [8] Conclusion - Meituan remains confident in its leadership position within local services and anticipates a gradual normalization of food delivery subsidies, which should support profit recovery in the coming years [7]