2025-10-27 00:31Summary of Meituan (3690.HK) Conference Call Company Overview - Company: Meituan (3690.HK) - Industry: Food Delivery and Local Commerce in China - Current Price: HK$96.50 (as of 21 Oct 2025) - Price Target: HK$100.00 (revised from HK$105.00) Key Financial Changes - Adjusted EPS: - 2025E: Revised from (RMB 1.10) to (RMB 2.59) [2] - 2026E: Revised from (RMB 0.85) to (RMB 1.11) [2] - Revenue: - 2025E: Revised from RMB 396,211 million to RMB 374,539 million [2] - 2026E: Revised from RMB 448,352 million to RMB 422,106 million [2] - Adjusted EBIT: - 2025E: Revised from (RMB 7,533 million) to (RMB 16,846 million) [2] - 2026E: Revised from RMB 4,710 million to (RMB 4,971 million) [2] Quarterly Forecasts - 3Q25 Adjusted EPS: Expected to be (RMB 2.69) [3] - 4Q25 Adjusted EPS: Expected to be (RMB 1.95) [3] - FY25 Adjusted EPS: Expected to be (RMB 2.59) [3] Competitive Landscape - Market Pressure: High competitive intensity in China's food delivery market is expected to impact Meituan's financials negatively in 3Q25 and 4Q25 [7][10]. - Subsidy Strategy: Meituan is likely to maintain its subsidy levels to protect market share despite increased competition from Alibaba and others [10]. - Expansion Plans: Meituan plans to enter the Brazilian market by the end of 2025, which may further strain financials [7][10]. Financial Outlook - Projected Losses: Anticipated total loss of RMB 20 billion from on-demand services in 3Q25, with RMB 19 billion from food delivery and RMB 1 billion from instashopping [8]. - Core Local Commerce: Expected operating profit to decline significantly to a loss of RMB 15 billion in 3Q25 from a profit of RMB 4 billion in 2Q25 [8]. - Revenue Growth: Projected revenue growth of 5% YoY in 3Q25, with core local commerce revenue expected to barely grow [8]. Valuation Metrics - Price Target Basis: The price target of HK$100 is based on a 15x P/E multiple for 2027E, aligning with Tencent's valuation [11][17]. - Performance Drivers: The financial outlook is under pressure due to competition and expansion costs, which may affect future earnings [10]. Risks to Rating and Price Target - Downside Risks: - Worse-than-expected consumption environment [18]. - Slower-than-expected narrowing of losses in new initiatives [18]. - Intensified competition in the in-store business [18]. - Upside Risks: - Better-than-expected competitive landscape [18]. - Faster-than-expected loss narrowing of new initiatives [18]. Conclusion - Rating: Neutral - Investment Thesis: The financial outlook for Meituan remains uncertain due to competitive pressures and expansion costs, leading to a cautious stance on the stock [10][16].