Caitong Securities Initiates Coverage on Meituan-W (03690) with "Overweight" Rating, Focusing on New Business Growth

Stock News12-08 17:50

Caitong Securities released a research report stating that Meituan-W (03690) is a domestic leader in local commerce with solid long-term barriers. Short-term competitive disruptions do not alter its long-term value, as the company, as China's leading local commerce platform, is actively exploring new business growth opportunities. The brokerage initiated coverage with an "Overweight" rating and projected the company's revenue for 2025-2027 to reach RMB 366.2 billion, RMB 417.4 billion, and RMB 468.9 billion, respectively.

Key highlights from Caitong Securities include:

**Leading Local Commerce Platform Actively Pursuing New Business Growth** Meituan, as China's top local commerce platform, operates core businesses such as food delivery, instant retail (ShanGou), and in-store services (including travel and hotel bookings). It is also expanding into new ventures like Xiaoxiang Supermarket and Kuailu, alongside exploring overseas markets.

Macroeconomic conditions remain the dominant beta factor, with the downstream service sector exhibiting higher growth rates and stronger discretionary attributes compared to retail goods, enhancing the platform's scalability and resilience. Against the backdrop of rising digitalization, food delivery remains relatively stable, forming a robust foundation, while in-store services and instant retail are accelerating penetration, driving high growth.

**Exploring Overseas Markets to Expand TAM** Meituan is rapidly expanding its food delivery business into overseas markets, achieving progress in regions like Hong Kong and Saudi Arabia. Its Hong Kong platform, Keeta, turned profitable in October this year, with UE metrics showing significant quarter-on-quarter growth in Q3 2025. The company continues to explore opportunities in the Middle East and Latin America.

Although Meituan's international strategy started later than peers, its long-term vision positions it to significantly broaden its Total Addressable Market (TAM) in the global local services sector, creating structural flexibility for future profit growth.

**Risk Factors**: - Slower-than-expected macroeconomic and consumer demand recovery. - Intensifying competition in the instant retail industry. - Regulatory uncertainties. - Overseas market risks.

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