Meituan Dianping Ord Cl B

Thank you for standing by and welcome to the METON fourth quarter and full year 2024 earnings conference call. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Scarlett Xu, VP and Head of Capital Markets. Please go ahead.

Thank you, Operator. Good evening and good morning, everyone. Welcome to our fourth quarter and fiscal year 2024 earnings conference call. Joining us today are Mr. Xin Wang, Chairman and CEO, and Mr. Shaofui Chen, Senior Vice President and CFO of Meituan. For today's call, management will first provide a review of our fourth quarter and fiscal year 2024 results and then conduct a Q&A session. Before we start, we would like to remind you that our presentation contains forward-looking statements, which include a number of risks and uncertainties, and may differ from the actual results in the future. This presentation also contains an audit of IFI's accounting standards financial measures that should be considered in addition to and not as a substitute for measures of the company's financial performance prepared in accordance with IFI's accounting standards. For a detailed discussion of risk factors and non-IFIS accounting standards measures, please refer to the disclosure document in the IR section of our website. Now I will turn the call over to Mr. Xin Wang. Please go ahead, Xin.

Thank you, Scarlett. Good evening, everyone. 2024 was an important year for Meitan. We adapted to the evolving consumption trends and facilitated industry transformation. For the full year of 2024, our total revenue increased by 22% year-over-year to IMB 337.6 billion. Annual transacting users exceeded 770 million. And annual active merchants increased notably to 14.5 million. Average purchase frequency of annual transacting user reached Newheim. And as a leading platform for local services, we explore the new growth opportunities through industry innovations and broad changes to consumers' daily lives, emergency business operations. As we maintain the steady growth in all our core business areas, we also help unleash consumer demand in the local services. In food delivery, We further expanded consumption scenarios and broadened the price spans through our ongoing innovations on the supply side. In Meituan Instant Shopping, we significantly expanded product selections through Meituan Instant Mart, effectively spurring consumer demand in on-demand retail. Regarding the in-store business, we unlocked the consumption potential in services retail through a wider selection of value for money group-buy deals. Meanwhile, we actively expanded into the overseas markets. In the fourth quarter, Kita was officially launched in Saudi Arabia, bringing China's speed to Saudi Arabian consumers for food delivery services. In addition, we continue to drive innovations and apply advanced technologies in the on-demand delivery space. For example, by the end of 2024, the accumulated number of commercial orders produced by our autonomous vehicles and drones have reached 4.9 million and 1.45 million, respectively. Our drone business also started a commercial operation in Dubai recently. In the long run, we believe technology will continue to transform the retail industry and will help us better fulfill our mission to help people eat better, live better. In 2034, we achieved a steady growth in our own demand delivery business with a daily order volume exceeding 98 million on the first day of autumn . And we are delighted to see that food delivery has become an important growth driver for the restaurant business. And on-demand retail has become an indispensable component of the retail industry and the lifestyle of more young people. As an industry leader, our own demand delivery business actively adapted to the evolving consumption trends. We further improved our consumer mind share of value for money and cultivated a more efficient and inclusive ecosystem. We explored supply chain innovations and refined operations, enhancing our ability to cope with different consumer demands, especially The development of new supply models created growth opportunities and helped the merchant withstand external challenges, further solidifying our competence on the supply side. For example, during 2024, the order volume of Ping Hao Fan kept hitting new highs. Ping Hao Fan has redefined affordable catering as an innovative business model that benefits both merchants and consumers. We continue to expand the supply, enhance food safety control, and improve the user experience of Pinghao farms, which incentivize the consumer demand in more scenarios and lift the consumer purchase frequency. For branded merchants, the branded satellite store is a new way to expand the business scale at a lower cost. This model allows branded merchants to offer a better price than in-store dining and bring consumers affordable and high-quality options. Meituan Instant Mart is another good example. In the past year, the number of Meituan Instant Mart and its order contribution both experienced rapid growth The progress was even more evident in the lower tier markets, and that has helped deepen online penetration of on-demand retail. Product diversity of Meituan Instamart was substantially improved, not only for convenience store supply, but also in many other vertical categories. In 2024, many large traditional retailers actively embraced the Meituan Instamart model. It complements traditional offline retail supply and enhances the convenience of on-demand retail, which further stimulates consumer needs. Our advantage on the supply side has significantly enhanced our brand awareness and elevated consumer experience. On-demand retail is no longer just about fulfilling consumers' urgent needs. It has evolved into a lifestyle characterized by a high level of certainty. Additionally, we continue to improve our services across different on-demand delivery categories. For example, consumers can enjoy one-stop services covering home testing, online diagnosis, medical insurance payment, and on-demand delivery when purchasing medicines on our platform. At our on-demand delivery business growth, we remain steadfast in our commitment to cultivating a sustainable ecosystem. On the merchant front, we streamlined our promotional schemes, standardized marketing activities, which largely mitigated irrational competition of the industry. We further enhanced the food safety management and improved the governance of malicious negative reviews. We also launched an RMB 1 billion merchant support program in the fourth quarter. By offering cash support and platform subsidies, we aim to help merchants improve their service quality, optimize efficiency, and explore innovations. For example, we provided digital tools and operational services free of charge for time-honored brands. Additionally, we largely extended the duration of traffic support for newly onboarded small and medium-sized merchants. Regarding couriers, enhancing their rights and benefits, and improving their work experience are our top priorities. Under the guidance of government authorities, we have accumulated, provided RMB 1.4 billion in occupational injury insurance for all the couriers in seven piloted provinces and cities since July 2022. Moreover, we implemented a series of courier-friendly measures. These include the introduction of anti-fatigue features in our system and providing special gathering accommodations for deaf and hearing-impaired couriers. We also provided support to the family members of numerous couriers who are facing major illness or are in need of educational aid. Moving forward, we will continue to invest in the ecosystem to drive sustainable development of the industry. Specifically, through in-depth research and under the guidance of relevant authorities, we have come up with a pilot plan for curious social security. We will roll out in some cities in the second quarter of 2025. In 2024, we actively adapted to the changing consumption trends and achieved rapid growth in the in-store business, thanks to our refined operations, new category expansions, and accelerated penetration into lower-tier markets. For the in-store business, Order volume increased by over 65% year-over-year in 2024. Both annual transaction users and annual active merchants broke new highs. As China's leading platform for local services, we provide merchants integrated solutions that encompasses business infrastructure plus marketing tools plus digital asset accumulations. After our organizational restructuring, we further integrated all the resources across different business lines and provided merchants with richer business infrastructure and traffic support. We offered merchants with more customized, diversified, and efficient marketing tools through special deals sessions. live streaming events, and theme-based campaigns. We also provided merchants with various tools and services, such as consumer insights, review management, and ranking lists to help merchants refine business operations and accumulate digital assets. Moreover, the upgraded Shen Hui Yuan membership directed our high-quality food delivery user traffic to in-store merchants, helping them improve marketing efficiency and boost transactions. Our solidified advantages on the supply side helped us further enhance consumer mindshare and drive business growth. In 2024, we actively capitalized on consumers' preference to access a wide array of leisure and entertainment services at a more affordable prices. Levering our expensive offerings, strong brand awareness, and high-quality services, we continue to expand into new categories and effectively incentivize consumption. Additionally, to capture the rising trends of county economy, and further dropped the demand for services retail, we accelerated the penetration of our in-store business in the lower tier markets. We developed easier to use operating toolkits for the small and medium sized merchants there, which lowered merchants' online operating barrier and accelerated merchant onboarding. we continue to enrich our offerings in group buy deals and packaged offerings through our tailored special deals session in those lower tier markets. As a result, our in-store business have achieved robust growth in the lower tier markets in 2024. In 2024, consumer demand for hotel and travel on our platform remained robust With the lower tier cities, niche travel destinations, value for money choices, and local accommodations emerging as new trends, fully tapping into our strengths in the lower tier markets and lower star hotels, we strengthened our collaborations with industry partners and improved the diversity and price competitiveness of our offerings. Meanwhile, We further leveraged our platform advantages and enhanced cross-sells with other categories. We identified the consumption needs in transportation, catering, and entertainment when consumers make travel plans and integrated resources across different categories to further refine our hotel plus X package deductions. On the merchant side, we precisely directed our user traffic, including the user traffic from our Shen Hui Yuan membership program to many low-star hotel merchants and offered comprehensive online tools and room renovation solutions. Moreover, we deepened our collaborations with high-star hotels in joint membership and joint marketing programs. Several leading hotel brands like Marriott, Wanda, and Intercontinental have actively participated in our Shen Hui Yuan membership program. For new initiatives in 2024, we continue to refine our operations in grocery retail and software and hardware services. and significantly improved their operational efficiency. We solidified our industry leadership in most of the new initiatives and accelerated our exploration in the overseas markets. After launching Kita in Riyadh last October, we further expanded Kita to all the major cities in Saudi Arabia with a user base and order volume growing rapidly. In the long run, we will continue to bring high-quality products and services to consumers and merchants in more regions around the world and help more people eat better, live better. Looking ahead, we will continue to facilitate the industry digital transformation, improve merchant operational efficiency, and help unleash consumption potential. While relatively Executing our retail technology strategy, we will actively embrace and expand investment in cutting-edge technologies such as AI or unmanned aerial delivery or autonomous delivery vehicles and accelerate the application of these technologies. We are committed to fully integrating AI into consumers' daily lives and help people eat better, live better. Furthermore, as an industry leader, we will also show our social responsibilities, create more job opportunities, and improve welfare for the couriers, and cultivate sustainable development of the local services ecosystem. With that, I will turn the call over to Shaohui for an update on our financial results.