美团Q1：食品配送业务回归盈亏平衡

+85221232659robin.zhu@bernsteinsg.com +85221232618charles.gou@bernsteinsg.com Market-PerformPrice Target +852 2123 2644minjoo.kang@bernsteinsg.com +8136777 6979hyrum.caesar@bernsteinsg.com Meituan Q1: Food back to breakeven expectations,whileoperatinglosses werebetterthanfeared.RMB91.Obnofgrouprevenuegrew5.6% year on year,splitting our estimateand Bloomberg consensus (RMB91.3bnandRMB90.8bn).RMB3.1bnofadjusted EBITDAlosswasnarrowerthanbothusand consensus(RMB5.1bnand RMB5.5bn).RMB2.ObnofCoreLocal Commerce losses thisquarterwasreflecting the normalisation of food delivery subsidies in China.RMB2.1bn of New Initiativesloss was also lower than guided. Furtherimprovementahead...assumingAlibabaplaysball.Seasonality shouldhelp Meituan report renewed food delivery profits in Q2. While the improvement remainscontingenton Alibaba spend, Meituan management clearlyfeel more in control,citingrebounding (70% and rising) share among orders over RMB30 anda 3RMB gap in relativeunit economics as reasons to be hopeful going forward. Based on Meituan commentary,weestimated Meituanfooddeliveryrevenue inQ1declined byalmost 10%,onhigh single-digitGTV growth. High single-digit In-store, Hotel & Travel revenue growth on low-teens GTVgrowth similarly showed ongoing competitive pressure from Bytedance, though interestinglythere were some gains in mid-to-high end hotels, at Trip.com's expense. Meituan's next arc?Meituan's near-termfinancial performance will continue to beinfluenced by competition with Alibaba and Bytedance.It's clearbreakeven will arrivesoonerthanthe streethadpreviouslymodelled,butthestock was alreadyvalued oneventualnormalised profits,andwedoubttheconvergenceoffood delivery,quickcommerce,ande-commerce will fully unwind. Strategically, Al, physical retail, and Brazil will graduallyreplaceMiddleEast expansion (Saudibreakeven next year,regional breakeven in 2028)as the primary driver of New Initiatives spend. The company's Al-related spend (booked inunallocated) this quarter was slightly over RMB1bn -this will increase over time too. InvestmentImplicationsWe rate Meituan Market-Perform (PTHKS85). Meituan's Q1 results showed revenue in-line with,and group-level losses narrowerthan we and Bloomberg consensus had modelled.Group and Core Local Commerce revenues of RMB91.0bn and RMB64.1bn grew 5.6% and 0.1% year on year,respectively.CoreLocal CommerceoperatinglossofRMB2.ObnwassignificantlyreducedcomparedwithRMB10.Obn inQ4,while stllimplying a large drop versus RMB13.5bn profit in the prior year quarter.New Initiatives loss of RMB2.1bn wasnarrower than we and the street had modelled (RMB2.5bn and RMB2.6bn), while"Unallocated"(RMB2.3bn)was worse than thestreet had assumed (RMB1.9bn loss), which the company attributed primarily to a RMB746mn SAMR fine, investment portfoliodeclines,and higher Aldevelopmentcosts. RMB5.1bn and RMB5.5bnof losses.Under Meituan'sreclassified revenue reporting startingthisquarter,CLC merchantservices revenue (which now encompasses commission and advertising revenues)grew 0.2% year on year.Meituan's group-level sales andmarketing spend this quarter (RMB23.0bn)grew51.1%orRMB7.8bnyear on year,butwas27.6%/RMB8.8bnlowercomparedtoQ42025. Basedon management commentary over the quarter, we estimate thatthecompany likely lost c.RMB1perfooddelivery orderH2 2026 probably won't come as a surprise to investors, compared against very high comps...GTV growth will likely be moreresilientas AOVlaps lowcompares. Our price target for Meituan continues to be based on a 1x 2027E PS multiple.While these results will givemore credence tothe practice of valuing Meituan on normalised earnings, it's not clear 2027E PE multiples can imply material upside without acomplete Alibaba retreat infooddelivery.Wenowmodelafasterpathto Core Local Commercebreakeven,though ourbasecase is Bytedance keeps some pressure on Meituan's IHT segment. Exhibit 3shows a summary of our estimate changesfor Meituan. Q1REPORTINGINCHARTS Exhibit 4 to Exhibit 11 show the key data points we track for the company on a quarterly basis. Q1, implying a negative 6.4% margin EXHIBIT6:Weestimatetotalfooddeliverytransactionsgrew c. 15% year on year to 5.9bn in Q1... Source: Corporate reports and Bernstein analysis. hotel&travelrevenue,toRMB16.4bn2022-2026:Meituanin-store,hotelandtravel losswasRMB5.9bninQ1,correspondingtoanegative15.7% margin operatingprofitof RMB4.0bn,implying c.25%margin EXHIBIT 11: New initiatives operating loss narrowedsequentially Source: Corporate reports and Bernstein analysis. References to "Bernstein" or the"Firm" in these disclosures relate to the following entities: Bernstein Institutional Services LLC (April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (April 1,2o24onwards)，SanfordC.Bernstein(HongKong)Limited盛博香港有限公司，SanfordC.Bernstein(Canada)Limited，SanfordSanfordC.BernsteinJapanKK（7才一下·C·八一个株式会社）andanalystsemployedbySocieteGeneraleAfrica Techn