$MEITUAN(03690.HK) 3Q24 Quick Interpretation: At first glance, Meituan's performance this quarter is clearly quite good. The revenue and operating profit exceeded expectations by nearly 2 billion and 4 billion respectively. Specifically:

1) The core local lifestyle business saw revenue and operating profit exceed expectations by about 1 billion. Combined with a year-on-year growth rate of 14.5% in instant delivery orders, this is generally in line with expectations. However, the revenue from the delivery business accelerated significantly by about 8 percentage points quarter-on-quarter, and the average delivery price has stopped declining and rebounded, which should be the main source of the positive surprise. This improvement in delivery user experience has led to profits exceeding expectations. From the 18% year-on-year growth rate in advertising revenue, it seems that the in-store business did not perform particularly better than expected (specific details still need to be communicated by management during the conference call).

2) Other innovative businesses also contributed nearly 1 billion in unexpected revenue and reduced losses. According to management, the growth and loss reduction of the community retail business, mainly driven by Meituan Youxuan, were better than expected. However, according to Dolphin Investment Research, buyers' expectations for losses in new businesses this quarter were not as high as those shown in Bloomberg's sell-side expectations.

3) Another major contribution to the group's overall nearly 4 billion in unexpected profits was that the group's undistributed profits turned from loss to profit this quarter by 130 million, while sell-side expectations were for a loss of 1.95 billion, resulting in a 2 billion expectation difference. This was due to Meituan confirming over 1.5 billion in exchange gains and over 500 million in investment gains this quarter. Such non-sustainable benefits do not need to be taken seriously.