美团第一季度：不惜一切代价

Robin ZhuCharles GouCharlie PengValuation MetricsAdjusted P/E (x)EV/EBITDA (x)Reported P/E (x)3690.HK Close Price (HKD)Price Target (HKD)Upside/(Downside)52-Week RangeMarket Cap (HKD) (M)YTD(14.7)7.3(22.0)Price Performance, 1YR08/2411/243690.HK RatingOutperformPrice Target3690.HKAdjusted EPS3690.HK (CNY)Source: Bloomberg, Bernstein estimates and analysis.Meituan Q1: Whatever it takesA bad L.Where to begin? Meituan management speaking on the calls signalled intentionsto “do whatever it takes” to prevail in the ongoing food delivery competition, pointing toslower revenue growth (reflecting contra-revenue incentives) and a decline in Core LocalCommerce profit in Q2. To our surprise, management called on industry regulators to calltime on “irrational competition". Plans to invest in Brazil were qualified with the observationthat there was “no hurry”, and $1bn in five years isn’t that much money. But the confluence ofoverlapping investment areas invokes unpleasant memories of 2023. A key point of debatefrom here will be the extent to which current high subsidy levels in food delivery can remainsustainable. But Meituan’s shares will likely remain under pressure until we see a meaningfulshift in the direction of competition. As analysts, we need to acknowledge that Meituan’scompetitive response (and the corresponding impact on earnings) are having to reach levelssignificantly beyond our previous expectations.The Q1 numbers looked fine.Meituan’s Q1 results came in more or less as guided, in-linewith our estimates, and coming in slightly further ahead of consensus. RMB86.6bn of grouprevenue grew 18.1% year on year, while RMB12.3bn of adjusted EBITDA was over 50%higher year on year. Core Local Commerce operating profit (RMB13.5bn) was 39.1% higheryear on year, and was 10% higher than street consensus on RMB12.2bn. Based on Meituancommentary around the quarter, we estimated low-teens percentage Food Delivery revenuegrowth in Q1. We put In-store, Hotel & Travel (IHT) revenue growth in the 20% range… versusa low-thirties percentage operating margin.Breaking things down by segment.Based on management commentary around thequarter, we estimated low-teens food delivery revenue growth in Q1… versus c. 10% ordervolume growth. In-store, Hotel & Travel revenue growth was closer to 20%, compared withslightly over 30% GTV growth. Q2 will feature the impact of heavy promotions leading upto 6.18, which will weigh on food delivery and Instashopping profits. We model a slightdeceleration in IHT GTV and revenue growth. New Initiatives loss will most likely remainsimilar to Q1, with Keeta losses offsetting improvement elsewhere.See the Disclosure Appendix of this report for required disclosures, analyst certifications and otherimportant information. Alternatively, visit our Global Research Disclosure Website.First Published: 26 May 2025 20:30 UTC Completion Date: 26 May 2025 17:05 UTC 190.00 HKDF26E9.73FinancialsRevenues (M)Gross Profit (M)Adjusted Net Income (M) F24AF25E7.037.90 F24AF25EF26E337,592386,486439,107129,785149,181172,82543,77249,19560,555 MEITUAN KITCHEN SINKS GUIDANCEMeituan's Q1 2025 results were (again) a typical “Meituan quarter”, with revenue and profit closely matching prior guidance,as well as our estimates and consensus. Group and Core Local Commerce revenues of RMB86.6bn and RMB64.3bn grew18.1% and 17.8% year on year, both marginally ahead of our estimates and Bloomberg consensus. Gross profit of RMB32.4bngrew 26.1% year on year, and implied 240bps of year on year margin expansion. Core Local Commerce operating profit ofRMB13.5bn was 39.1% higher year on year, and compared with our estimate and consensus on RMB13.8bn and RMB12.2bn.New Initiatives loss of RMB2.3bn was slightly lower than we and the street had modelled (both RMB2.4bn). Meituan adjustedEBITDA at the group level reached RMB12.3bn, in-line with our modelling into the quarter (RMB12.5bn), but ahead ofconsensus on RMB11.6bn. Advertising revenues within Core Local Commerce reached RMB11.9bn, which was 15.1% higheryear on year. Commission revenue meanwhile grew 20.1%. Meituan’s non-GAAP net profit was 3.5% and 12.6% ahead of ourestimates and consensus.Based on management commentary over the quarter, we estimate that food delivery volume and revenue grew 10% and14% respectively in Q1. We estimate IHT revenue grew in the 20% range last quarter, compared with c. 30% GTV growth,while operating margin was in the low-thirties range. Within the New Initiatives segment, Meituan Select and the Internationalbusiness were said to have contributed c. RMB1.7bn and RMB1.3bn of losses, respectively.It probably goes without saying that Meituan’s shares will react very negatively to the company’s “whatever it takes” guidance…even if countering aggressively is probably the right thing for Meituan to do. Commitment to other concurrent investmentvectors like Brazil and Meituan Select bring back unwelcome memories of 2023 when management capital allocation became alightni