竞争依然激烈，投资影响可能已经达到顶峰

Competition remains fierce while investmentimpact likelypeaked out Target PriceHK$154.40(Previous TPHK$164.00)Up/Downside60.7%Current PriceHK$96.10 For 3Q25E, we estimate Meituan achieved revenue of RMB97.8bn, inline withBloomberg consensus,translatinginto 4.6% YoY growth. During the period, weexpect thecompany inked adjusted net loss of RMB16.6bn,higher thanconsensusof RMB12.6bn,owing to fierce industry competition inthefooddelivery business.Although we believetheimpact from incremental investmenton operating profitfrom food deliverybusinessshouldbe at its peakin 3Q25,thepace of improvement in the competitive environment remains worthobserving, in our view.Weremain positive that industry competition shouldreturn to rationality in due course, and Meituan could sustain itsindustry-leadingposition in quality food delivery orders, such as main meals with relatively higheraverage order value (AOV). However,we are cautious in the near termasvisibilityon earnings growth recovery is not high. To account for fiercer than ourpreviously expected industrycompetition, we lower 2025E adj. NP forecast toloss of RMB12.4bn (from profit of RMB1.1bn), and cut DCF-based TP toHK$154.4(previous:HK$164.0). Maintain BUY. China Internet Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Ye TAO, CFAfranktao@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Joanna Ma(852) 3761 8838joannama@cmbi.com.hk Earnings pressure ofCLC business to persist in the near term.We areanticipating operating loss of RMB20.6bn forthefood delivery business in3Q25E, compared to operating profit of RMB9bn (based on our estimates)in 3Q24. Thefiercerthan our previously expected competition inthefooddelivery industry propelled us to lower overall operating profit forecast ofcore local commerce (CLC) business to-RMB15.5bn (3Q24: RMB14.6bn).Althoughwe believe that the impact from incremental investment onoperating profitshould have peaked out in 3Q25, giventhathigh seasonhas passed and Meituan’s industry peers have guided toimproveuniteconomicsin 4Q25, and this likely pointed to a more benign industrycompetitive environment,the pace of improvement in the competitiveenvironment remains worth observing, in our view.For 4Q25E,we arecurrentlyanticipatinggroup leveladjusted net loss of RMB8.3bn, narrowingfrom that in 3Q25E, buthigherthan consensusofloss ofRMB5.8bn. Stock Data New initiatives: eying on pace of international expansion.We maintainour forecast for new initiatives largely unchanged in 3Q25E, which isrevenue growthof 17.5% YoY and operating loss of RMB2.35bn.Thestrategic transformation for Meituan Selectsince June 2025should helpdrivesignificantloss reduction for Meituan Select in 2H25, while the pace ofinternational expansion for Keetaand Xiaoxiang Supermarket remains keyto watch, in our view. Source: FactSet Revision of forecast and valuation Key changes in our estimates include: 1) we lifted 2025-2027E revenue forecastsby 0-4% to factor inincrease in revenue forecast of new businesses driven by likely betterthanexpected revenue growthfrominternational expansion;2)we cut 2025E/2026E operating profit forecasts to loss ofRMB17.2bn/1.9bn (from RMB5.4bnloss/profit of RMB41.0bn) to factor in fiercer than our previouslyexpected industry competition in food delivery business, and likely slower than our previously expectedpace ofimprovement in the competitive landscape. DCF-based target price of HK$154.4 To account for the lowered earnings forecasts, our DCF-based TPislowered by5.9% to HK$154.4(WACC of 11.0%,terminal growth of 2.5%; both unchanged), translating into14x 2027E adjusted PE. Disclosures& Disclaimers Analyst CertificationThe research analyst who isprimary responsible for the content of this research report, in whole or in part, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential lossof over 10% over next 12 monthsNOT RATED: Stock is no