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<Research>UBS Predicts MEITUAN-W 2025 Food Delivery, UE to Grow Sturdily
UBS conducted a survey with an expert from a third-party local services agency, who indicated that MEITUAN-W (03690.HK)’s food delivery order growth in 4Q is forecast to stab...
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<Research>UBS Predicts MEITUAN-W 2025 Food Delivery, UE to Grow Sturdily
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UBS conducted a survey with an expert from a third-party local services agency, who indicated that MEITUAN-W (03690.HK)  0.000 (0.000%)    Short selling $978.77M; Ratio 16.195%   ’s food delivery order growth in 4Q is forecast to stabilize at a YoY rise of 10%, though QoQ growth will decelerate. Looking ahead to 2025, the expert projected order growth to hold steady at 10%, driven primarily by the integration of “to-home” and “in-store” services into the ShenHuiYuan membership program since July 2024.

By December, membership had grown to approximately 120 million people (up 20% QoQ), accounting for 24% of monthly active users (MAUs) per QuestMobile data. Members exhibit a 25% higher purchase frequency than non-members on average, and the expert anticipates that rising membership penetration will bolster average revenue per user (ARPU) going forward.

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Beyond initiatives like PinHaoFan for price-sensitive consumers and brand satellite stores for quality-focused demand, Meituan launched “Raccoon Canteen” in January. This model consolidates stalls from chain restaurants into a single location, allowing consumers to order from multiple merchants in one go to save on delivery fees. It also enhances operational efficiency and unit economics (UE), as riders can deliver multiple orders from a centralized hub.

UBS believes Meituan’s 4Q UE could excel market expectations (consensus at RMB1.2), as evidenced by Alibaba’s on track loss narrowing in local services. Following significant UE improvement in 2024, the expert expected stability in 2025 given increased merchant support and expanded rider social insurance coverage.

Trading at 18x 2025E PE amid high expectations, the broker believed Meituan share price may see consolidation into result with better clarity on growth outlook, impact from rider social insurance, as well as its overseas expansion scale. In the near term, amid a challenging macro environment, UBS expected Meituan to prioritize ecosystem investments and merchant support. Over the long term, the broker stayed optimistic about Meituan’s moat in the under-penetrated local services sector and its robust monetization potential, maintaining a Buy rating with a target price of HKD270 on the stock.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-03-03 16:25.)

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