Release Date: August 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenue increased by 21% year over year to RMB28.3 billion.
- Adjusted net profit increased by 77.6% to RMB13.6 billion.
- Annual transacting users and active merchants reached new highs of 753 million and 30 million, respectively.
- Average purchase frequency per annual transacting user increased for the 15th consecutive quarter.
- Meituan Instashopping posted robust growth, becoming a significant driver for local retailers.
Negative Points
- External challenges and evolving consumption trends impacted order volume growth.
- Average order value (AOV) for on-demand delivery faced a decline, though it started to normalize.
- In-store, hotel, and travel GTV growth lagged behind in-store business growth due to a high base from last year.
- The company is still experiencing losses in its new initiatives segment, although the losses are reducing.
- The competitive landscape remains intense, with competitors stepping up subsidies for local services.
Q & A Highlights
Q: How should we assess the impact of the challenging external environment on Meituan's core local commerce, and what strategies does the company have in place to mitigate these macroeconomic impacts?
A: Xing Wang, CEO: Despite the evolving consumption trends and challenges, our local commerce remains vibrant. We are focusing on personalized and diverse experiences, optimizing products, and exploring new supply formats like Pin Hao Fan to meet price-sensitive demand. We believe our core local commerce segment can maintain steady growth due to substantial potential for digital transformation.
Q: Could management share the synergies achieved from the recent organizational restructuring and provide updates on the upgraded membership program, Shen Hui Yuan?
A: Xing Wang, CEO: The restructuring has enhanced cross-sells and integrated operations across core local commerce. Shen Hui Yuan, our upgraded membership program, has expanded to more categories, driving growth in user frequency and merchant collaboration. It now covers over 2.5 million merchants, bringing additional growth in order volume and user scale.
Q: Were food delivery orders affected by the shift to offline consumption, and what is the recent performance of food delivery and Meituan Instashopping?
A: Shaohui Chen, CFO: While in-store dining demand has extended to lighter meals and beverages, the impact on food delivery order volume is limited. Food delivery still has low online penetration and strong growth potential. On-demand delivery, including Meituan Instashopping, maintained strong growth, with total order volume reaching 98 million on peak days.
Q: How does Meituan view the competitive dynamics in the local service market, and what are the projections for GTV growth and operating margin in the second half of the year?
A: Shaohui Chen, CFO: The competitive landscape remains stable, with a focus on ROI-driven growth strategies. We will leverage our shelf-based model and value-for-money offerings to attract more merchants and consumers. We expect solid year-over-year operating profit growth for our in-store, hotel, and travel business in the second half of 2024.
Q: Can you provide an update on the progress of new initiatives, particularly Meituan Select, and how will overseas expansion impact the loss reduction pace?
A: Xing Wang, CEO: New initiatives revenue grew by 29% year over year, driven by Xiaoxiang supermarket. Meituan Select continues to focus on loss reduction and efficiency improvement. Overseas expansion is in the early stages and will have a limited impact on the segment's operating loss this year.
Q: Given the recent share repurchases, will management consider launching an additional buyback plan, and what are the thoughts on a more systematic shareholder return policy?
A: Shaohui Chen, CFO: We have repurchased over USD2 billion worth of shares and plan to cancel all repurchased shares. Our Board has approved another USD1 billion buyback plan, reflecting our confidence in long-term share value. We aim to offset the dilutive effect of ESOP grants through share buybacks and maintain a flexible strategy for future buybacks.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
