"Forecast" Brokers expect Meituan's adjusted profit in the first quarter to increase by nearly 32% year-on-year, focusing on the economic performance per unit of the delivery business and the performance of new businesses

AASTOCKS
2025.05.26 03:39

Meituan-W (03690.HK) will announce its first-quarter results for 2025 next Monday (26th). Benefiting from the continuous growth of its core local business (delivery and in-store services) and an increase in adjusted net profit margin, our website has compiled forecasts from four brokerages, predicting that Meituan's adjusted net profit for the first quarter of this year, measured by non-International Financial Reporting Standards, will range from RMB 9.04 billion to RMB 10.128 billion, compared to an adjusted net profit of RMB 7.488 billion in the same period last year, representing a year-on-year growth of 20.7% to 35.3%, with a median of RMB 9.857 billion, a year-on-year increase of 31.6%.

Based on forecasts from three brokerages, Meituan's profit for the first quarter of this year is expected to range from RMB 7.217 billion to RMB 8.462 billion, compared to RMB 5.369 billion in the same period last year, representing a year-on-year increase of 34.4% to 57.6%.

Our website has compiled forecasts from five brokerages, predicting that Meituan's revenue for the first quarter of 2025 will range from RMB 85.253 billion to RMB 85.727 billion, representing a year-on-year growth of 16.3% to 17%, with a median of RMB 85.36 billion, a year-on-year increase of 16.5%.

JD.com (09618.HK) has recently entered the delivery and flash purchase business, with JD's daily order volume for delivery surpassing 20 million. The market will focus on Meituan's management's views on industry competition, subsidies, the economic value per share of its food delivery business, the pressures it faces, the company's future new businesses (such as Meituan Youxuan and Xiaoxiang Supermarket), and its overseas expansion strategies and subsidy scales (such as Keeta's investments in the Middle East and Brazil).

【Core Business Continues to Grow, Focus on Industry Competition】

Citi published a report yesterday, estimating that Meituan's adjusted net profit for the first quarter, measured by non-International Financial Reporting Standards, will be RMB 9.932 billion, a year-on-year increase of 32.6%. It is expected that the core local business will remain robust in the first quarter, with total revenue and adjusted EBIT expected to grow by 17% and 44% year-on-year, reaching RMB 85.4 billion and RMB 10 billion, respectively. The growth of delivery orders improved in March, while flash purchases and in-store, hotel, and tourism businesses may achieve approximately 20% year-on-year growth, benefiting from trade-in subsidies, InstaMart, and cross-selling under the "Shen Member" platform. Core adjusted EBIT may grow by 28% year-on-year to RMB 12.4 billion, with improved profit margins in business segments, while losses from new businesses in the first quarter are expected to narrow year-on-year to RMB 2.4 billion. However, considering the intensified competition from JD.com in the delivery sector and the potential pressure on future profit margins from rapid overseas expansion, the brokerage has lowered its adjusted net profit forecasts for Meituan for the fiscal years 2025 and 2026 by 4% and 6%, respectively.

Citi expects Meituan's delivery business revenue in the first quarter of 2025 to grow by 13% year-on-year to RMB 41.1 billion, primarily driven by approximately 10% growth in order volume. Compared to January and February, order growth in March showed a month-on-month improvement. The average order value (AOV) remained flat year-on-year, while the marketing commission rate increased, as merchants intensified promotions amid a weak macroeconomic environment. The brokerage expects Meituan's adjusted EBIT in the first quarter to grow by 17% year-on-year to RMB 6.6 billion, with a profit margin of 16% (an increase of 0.4 percentage points year-on-year), benefiting from reduced subsidies and lower rider costsHowever, with the introduction of more VIP member subsidies targeting JD.com in the second quarter, profit margins may decline. In addition, Meituan plans to invest 100 billion RMB in the catering industry over the next three years for consumer and merchant subsidies as well as merchant support.

Citi estimates that Meituan's flash purchase revenue in the first quarter will grow approximately 28% year-on-year to 7 billion RMB, mainly benefiting from about 28% growth in order volume and higher marketing demand. The flash purchase business introduced a trade-in subsidy policy in May, collaborating with brands such as Apple, Xiaomi, Huawei, and OPPO to offer a "30-minute delivery" service. InstaMart is also expected to drive consumption demand in lower-tier cities. Adjusted EBIT further improved to 644 million RMB. Furthermore, the bank expects revenue from in-store, hotel, and travel businesses to grow approximately 22% year-on-year to 15.6 billion RMB in the first quarter of 2025. The "God Member" platform plans to launch AI agent services to provide consumers with personalized services such as itinerary planning and restaurant reservations.

Citi released a research report stating that Meituan's adjusted net profit for the first quarter of this year is expected to be 9.782 billion RMB, an increase of 30.6% year-on-year. It forecasts the total gross transaction value (GTV) for food delivery to be 257 billion RMB (an annual increase of 8.9%), benefiting from a 10% year-on-year increase in daily transaction volume to 57.24 million or 5.515 billion RMB. The average order value (AOV) decreased by 1% year-on-year to 49.9 RMB, and the forecasted operating profit margin for food delivery is 16.9%, with unit economic value (UE) reaching 1.32 RMB (an annual increase of 13%). Although Meituan's first-quarter performance is expected to meet the bank's and market forecasts, the focus will be on the growth of food delivery volume, average order value, gross transaction value, revenue, rider costs, and the impact on unit economics for the second quarter and the entire year. The bank expects Meituan to face industry competition, with unit economics (UE) for food delivery at 1.38 RMB and 1.37 RMB for 2025 and 2026, respectively.

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According to a comprehensive analysis from four brokerages, Meituan's adjusted net profit for the first quarter of this year is forecasted to be between 9.04 billion and 10.128 billion RMB, compared to an adjusted net profit of 7.488 billion RMB in the same period last year, representing a year-on-year growth of 20.7% to 35.3%, with a median of 9.857 billion RMB, an annual increase of 31.6%.

Brokerage│Forecast for adjusted net profit for the first quarter of 2025 (RMB)│Year-on-year change

Goldman Sachs│10.128 billion│+35.3%

Citi│9.932 billion│+32.6%

Citi│9.782 billion│+30.6%CICC | RMB 9.04 billion | +20.7%

Based on Meituan's adjusted net profit of RMB 7.488 billion for the first quarter of 2024 according to non-International Financial Reporting Standards

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According to the forecasts of three brokerages, Meituan's profit for the first quarter of this year is expected to be between RMB 7.217 billion and RMB 8.462 billion, compared to RMB 5.369 billion in the same period last year, representing a year-on-year increase of 34.4% to 57.6%.

Brokerage | 2025 Q1 Profit Forecast (RMB) | Year-on-Year Change

Citi | RMB 8.462 billion | +57.6%

Citi | RMB 7.926 billion | +47.6%

CICC | RMB 7.217 billion | +34.4%

Based on Meituan's profit of RMB 5.369 billion for the first quarter of 2024

According to the comprehensive forecasts of five brokerages, Meituan's revenue for the first quarter of 2025 is expected to be between RMB 85.253 billion and RMB 85.727 billion, representing a year-on-year growth of 16.3% to 17%, with a median of RMB 85.36 billion, reflecting a year-on-year increase of 16.5%.

Brokerage | 2025 Q1 Revenue Forecast (RMB) | Year-on-Year Change

Goldman Sachs | RMB 85.727 billion | +17%

Citi | RMB 85.571 billion | +16.8%

Citi | RMB 85.36 billion | +16.5%

CICC | RMB 85.327 billion | +16.4%

Dongfang Securities | RMB 85.253 billion | +16.3%

Based on Meituan's revenue of RMB 73.276 billion for the first quarter of 2024

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