2025-12-01 03:18Summary of Meituan's Earnings Call Company Overview - Company: Meituan (3690.HK) - Industry: Food delivery and local services in China Key Points Financial Performance and Forecasts - Meituan's Q4 2025 earnings forecast has been reduced by 31% due to declining profitability in its in-store business [1][12] - Revenue estimates for 2025 and 2026 have been adjusted downwards by 2% and 5% respectively, reflecting the impact of intensified competition on revenue and profits [16] - Adjusted earnings per share (EPS) for 2025 is now projected at -3.11 CNY, down from -2.59 CNY, indicating a 20% decrease [16] - The target price for Meituan is set at 95 HKD, based on a 15x multiple of the expected 2027 earnings [20][19] Competitive Landscape - Meituan maintains a leading position in the mid-to-high price order market for food delivery, but faces increasing competition from Alibaba, which is gradually capturing high-value consumer segments [2][12] - The competition is expected to intensify, particularly with Alibaba enhancing its 88VIP membership benefits, indicating that the battle for high-value users will be crucial in the Chinese food delivery and local services market [2][12] Business Segments - Food Delivery: The worst period is believed to be over, with management noting improvements in unit economics due to a better competitive landscape. However, price competition is expected to ease gradually [5][12] - In-store Business: The core local business saw a year-on-year decline in operating profit of 29 billion CNY, attributed to increased competition from Alibaba and Douyin [6][12] - New Ventures: Meituan's international food delivery brand "Keeta" has expanded into Qatar, Kuwait, Dubai, and Brazil, which is expected to increase losses in the short term but shows long-term potential [5][12] Risks and Uncertainties - Significant uncertainties exist regarding the sustainability of profitability in the in-store business, the intensity and duration of subsidy wars in food delivery, and the capital intensity and return cycles of overseas investments [1][12][19] - Downside risks include a weaker-than-expected consumer environment and slower-than-expected narrowing of losses in community group buying [21][19] Market Performance - Meituan's stock has underperformed, with a year-to-date decline of 32.4% and a 12-month decline of 40.5% [9][12] - The stock's valuation upside is considered limited until clearer evidence of improved profitability and rational competition emerges [12][19] Conclusion - The overall outlook for Meituan remains cautious, with a "Neutral" rating maintained until more predictable profit trends and rational competition in the core food delivery business are observed [12][19]