Release Date: November 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Meituan (MPNGF, Financial) reported a 22.4% year-over-year increase in total revenue, reaching RMB93.6 billion.
- Adjusted net profit surged by 124% to RMB12.2 billion, showcasing significant profitability improvements.
- The company has seen record highs in annual active merchants and transacting users, indicating strong market engagement.
- Meituan's innovative business models, such as Pin Hao Fan, have attracted over 100 million value users, enhancing consumer engagement.
- The company has successfully expanded its Meituan InstaMart and Xiaoxiang operations, particularly in lower-tier cities, meeting growing consumer demand.
Negative Points
- The average order value in the on-demand delivery segment has declined, although the decline is narrowing.
- Despite strong growth, the company faces challenges in balancing growth and profitability, particularly in the competitive local commerce sector.
- The international expansion, particularly in Saudi Arabia, is still in its early stages and may take time to yield significant results.
- Meituan's new initiatives, while showing progress, continue to incur losses, although these are narrowing.
- The company faces intense competition in the local commerce industry, requiring continuous innovation and investment to maintain its market position.
Q & A Highlights
Q: My question is about the food delivery business. Can you share more details on the initiatives announced at the catering conference to support industry development and how should we project future growth?
A: Xing Wang, CEO: We are committed to being a trusted partner for restaurant merchants to enable their growth. We upgraded our model program, Shen Hui Yuan, to promote industry innovation and unlock market demand. We offer subsidies to support merchants focusing on product development and business innovation. Despite reaching a mature stage, food delivery has significant potential for future growth as it becomes a lifestyle choice for more people.
Q: How should we project the growth of co-local commerce next year and how do we balance growth and profitability?
A: Shaohui Chen, CFO: We are confident that co-local commerce will maintain healthy growth. Our on-demand retail business, particularly Meituan Instashopping, will continue to grow significantly. We will focus on high-quality growth and maintaining a healthy ecosystem, investing in our ecosystem to support merchants and achieve sustainable profit growth.
Q: How should we size the eventual penetration of quick commerce on online retail goods or sales, and what role does Instashopping play?
A: Shaohui Chen, CFO: On-demand retail will account for over 10% of the total e-commerce market in the long run. Meituan Instashopping is a high-potential area, with over 30,000 InstaMart locations. We anticipate more large retailers joining us, enhancing product variety and quality. We aim for Meituan Instashopping to reach a GTV scale of over RMB200 billion by 2027.
Q: Could you share more about the recent progress in the in-store hotel and travel segment, particularly in lower-tier cities?
A: Shaohui Chen, CFO: The Shen Hui Yuan program has made notable progress, with over 50% of merchants participating. We are expanding in lower-tier markets, leveraging our platform's tools to support merchant expansion. Our in-store business achieved high growth in these markets, and we remain confident in our long-term competitive strength.
Q: How is Kita's expansion progressing in Saudi Arabia, and what are the plans for overseas investment?
A: Xing Wang, CEO: Kita launched in Riyadh in October and has seen encouraging progress. We focus on Saudi Arabia for now, but our long-term strategy includes global expansion. We aim to bring our products and services to more markets, creating value for consumers and merchants, but we will proceed with patience and informed decisions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
