2025-12-01 00:49Meituan (3690.HK) 3Q25 Earnings Call Summary Company Overview - Company: Meituan (3690.HK) - Industry: E-commerce and local services in China Key Financial Highlights - Adjusted Operating Loss: Rmb -17.5 billion, better than Goldman Sachs estimate (GSe) of Rmb -18.8 billion [1] - Core Local Commerce (CLC) Loss: Rmb -14.1 billion, above GSe of Rmb -15.1 billion but below Visible Alpha consensus of Rmb -13.1 billion [1] - New Initiatives Loss: Rmb -1.3 billion, better than both GSe and Visible Alpha consensus (GSe: Rmb -2.3 billion) [1] - 3Q25 Net Revenue: Rmb 95.488 billion, a 2% increase year-over-year [16] - Adjusted EBITDA: Rmb -14.842 billion, a decline of 202% year-over-year [16] Competitive Landscape - Food Delivery Competition: Intensity has decreased post-Singles' Day festival, with Meituan regaining market share [8] - Long-term Competition Outlook: Expected to shift from capital-driven to efficiency-driven, focusing on high-quality orders and fast delivery [8] - Instashopping Losses: Anticipated to widen in 4Q due to increased investment in user experience and supply-side operations [9] Segment Performance - Core Local Commerce: Revenue declined by 3% year-over-year, with a significant loss in adjusted EBIT margin [19] - Food Delivery: Estimated losses of Rmb -20 billion, compared to Alibaba's Rmb -36 billion [7] - In-store, Hotel & Travel (IHT): EBIT margin fell to around 28%, with growth moderating to high-teens percentage [7] - New Initiatives: Revenue growth of 16% to Rmb 28.0 billion, driven by grocery retail and overseas expansion [7] Technology and AI Initiatives - AI Strategies: Development of AI models and chatbots to enhance user experience and support local services [11] International Expansion - Keeta: Achieved profitability in Hong Kong ahead of schedule, with plans to expand into the Middle East and Brazil [12] Future Outlook - 4Q25 Expectations: Anticipated narrowing of losses, with a focus on improving average order value (AOV) and managing competition [19] - Long-term Growth Drivers: Expected recovery in profits over 2026-27, supported by AI applications and new market entries [14] Risks - Key Risks Identified: Increased competition, labor cost inflation, and food safety concerns [15] Investment Recommendation - Rating: Buy with a 12-month price target of HK$139, indicating a potential upside of 35.6% from the current price of HK$102.50 [19]