2025-12-03 02:16Meituan Q3 2025 Earnings Call Summary Company Overview - Company: Meituan - Ticker: 3690.HK - Industry: Internet and On-Demand Delivery Services Key Financial Metrics - Q3 2025 Revenue: RMB 95.5 billion, a year-on-year increase of 2.0%, missing Bloomberg consensus of RMB 97.5 billion [1][10][17] - Adjusted EBITDA Loss: RMB 14.8 billion, worse than estimates of RMB 13.0 billion and consensus of RMB 11.5 billion [1][11] - Core Local Commerce Revenue: RMB 67.4 billion, down 2.8% year-on-year, missing estimates of RMB 74.1 billion [10][17] - Gross Profit: RMB 25.2 billion, a decline of 31.5% year-on-year, with a gross margin of 26.4% [10][18] - Core Local Commerce Operating Loss: RMB 14.1 billion, compared to a profit of RMB 14.6 billion a year earlier [1][10][17] Market Position and Competitive Landscape - Meituan's market share in orders over RMB 30 remains at 70%, but it has lost 15-20 percentage points of GMV share to Alibaba [2][15] - The company faces increased competition, with Alibaba's food delivery app narrowing the daily active user (DAU) gap significantly [2][15][16] - Meituan's unit rider cost is now higher than Alibaba's, indicating increased operational challenges [2][16] Management Commentary and Strategic Outlook - Management expects narrower food delivery losses in Q4, but anticipates continued pressure on margins due to increased incentives from competitors [3][14] - The company is investing in overseas markets, with a notable break-even in Hong Kong, but this strategy may be seen as misaligned with the need to stabilize domestic operations [3][4] - The sentiment around Meituan has turned negative, with expectations for further downward revisions in estimates [4][21] Investment Implications - Rating: Market-Perform with a price target of HKD 85, reflecting a downside of 17% from the current price of HKD 102.50 [5][52] - Valuation Metrics: Adjusted P/E for 2025E is projected at -33.6x, indicating significant losses [8][52] - Risks: Include macroeconomic factors, competition, regulatory risks, and losses in new business ventures [58][59] Financial Forecasts - Revenue Estimates: Revised down for 2025E to RMB 364.1 billion from RMB 377.1 billion, with growth rates also adjusted downward [21][23] - Non-GAAP Net Income: Expected to worsen to a loss of RMB 17.2 billion in 2025E [21][23] Summary of Key Numbers - Total Revenue: RMB 95.5 billion, +2.0% YoY [19] - Gross Profit: RMB 25.2 billion, -31.5% YoY [19] - Adjusted EBITDA: -RMB 14.8 billion [19] - Core Local Commerce Operating Loss: -RMB 14.1 billion [19] Conclusion Meituan's Q3 2025 results reflect ongoing challenges in the competitive landscape, with significant losses and a need for strategic realignment. The company's future performance will depend on its ability to stabilize its domestic market while managing increased competition and operational costs.