Meituan Dianping Ord Cl B

Thank you for standing by and welcome to the Meituan first quarter 2025 earnings conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you would like to ask a question, you'll need to press the star key followed by number one on your telephone keypad. I would now like to hand the conference over to Scarlett Hsu, VP and Head of Capital Market. Please go ahead.

Thank you, operator. Good evening and good morning, everyone. Welcome to our first quarter of 2025 earnings conference call. Joining us today are Mr. Hsing Wang, Chairman and the CEO, and Mr. Shao-Hui Chen, Senior Vice President and the CFO of Netlamp. For today's call, management will first provide a review of our first quarter of 2025 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 actual results in the future. This presentation also contains an audited non-IFI 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 not as accounting standard 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. Hello, everyone. In the first quarter, our business maintained steady growth, with revenue increasing by 18.1% year-over-year. to RMB 86.6 billion. Those annual transacting users and annual active merchants reached new highs. We are delighted that an increasing number of consumers and merchants choose Meituan as their preferred platform for local services. Beyond our ongoing efforts in enhancing products and services to elevate their experience, we have continued to expand our investments in the ecosystem development, actively promote the industry's healthy growth and unlock greater consumption potential for China's local services through improved supply and service innovations. Since the launching of our food delivery business more than 11 years ago, We have continuously diversified our product offerings, broadened our price bands, and optimized our 30-minute delivery network to bring better services and choices to hundreds of millions of consumers. Over the years, we also supported millions of merchants, especially small or medium-sized merchants, to reach out to new customers. achieve business growth, and navigate industry cycles. To promote the industry transition into a phase that focuses on healthy development, we aim to further facilitate industry transformation, enhance the online business operation environment, and generate greater value for the food service industry. Through our innovative and refined supply models. We continue to help restaurant merchants uncover new growth opportunities. For example, we actively promoted brand satellite stores, Ping Pai Wei Xin Dian, and that enabled chain restaurant to rapid expand their geographical presence with a much lower cost compared to traditional dye-in establishments. By the end of the first quarter, more than 480 brands have successfully launched more than 3,000 high-quality branded satellite stores all in one time. What's more impressive is the average revenue per store is several times that of a typical dye-in store. And besides branded satellite stores, we also designed and refined other innovative offline business formats, different formats, offering customized growth strategies and operational solutions for chain restaurant merchants. Additionally, we introduced our self-operated cloud kitchen tailored for chain restaurant brands Meanwhile, we fully recognize that small and medium-sized merchants are the cornerstone of China's food service industry. These businesses are also essential to the local employment and community economy. We remain steadfastly committed to providing more support to the small and medium-sized merchants. Our goal is to ensure that those small and medium-sized merchants who operate diligently on our platform gain visibility and trust from consumers and gradually become consumers' preferred choices. In Q1, we further implemented a comprehensive range of measures to support high-quality small and medium-sized merchants. These include providing financial assistance traffic support, free digital tools, and online services. By doing so, we effectively help this merchant improve supply, elevate service quality, and offer broader selections. Furthermore, recognizing the importance of food safety and product quality, we have launched a bright kitchen program, and other food safety measures to enhance our platform's supply quality. We believe higher transparency allows consumers to easily discover high-quality restaurants. To support micro-merchants, including family-owned restaurants and community restaurants, we offer them targeted subsidies to cover costs, such as hardware procurement and installation expenses, to join our Bright Kitchen program. And looking ahead, we plan to invest RMB 100 billion over the next three years to drive the whole food service industry to high-quality growth. These resources will be used to support merchants across various categories and to boost consumer demand. Couriers are an indispensable part of our ecosystem. Over the past decade, we have consistently enhanced our measures to protect couriers' rights and interests and to improve their working experience. Since July 2022, we have provided over RMB $1.5 billion in occupational injury insurance for all couriers on our platform across seven pilot provinces. We plan to roll out occupational injury insurance to more provinces this year and expand nationwide by the end of next year. This April, we also launched a new pension pilot program for couriers. That will be gradually rolled out nationwide in the future. Meanwhile, we offer comprehensive talent development programs and career promotion paths for careers. Notably, 86% of the management positions within our degree network are filled by careers promoted from the front line. We also provide couriers diverse job transfer opportunities within our platform and already sponsored hundreds of couriers to enroll in universities for higher education. Beyond work support, we provide living and healthcare assistance to couriers and their families. For example, we have allocated more than RMB 100 million in critical illness aid for over 6,000 Korean and their families. Through our Baby Can Glue charity program, and that is . We have provided tens of millions of RMB medical assistance funds and provides educational support for Korean children. We also place great emphasis on supporting female Koreans In 2024, the number of female couriers who have received income from our platform exceeded 700,000. This March, we provided female couriers with free one-year coverage of critical illness insurance for women. Looking ahead, we will collect more feedback and suggestions from our couriers continue to enhance their welfare and ensure that their hard work is duly recognized and rewarded. In Q1, Meituan Instant Shopping continued to deliver robust growth, underscoring the great potential of on-demand retail and its broader consumer recognition. In April, we officially launched our on-demand retail brand, Meituan Instant Shopping, Meituan Sun Go. Consumers can easily access the InstaShopping page directly from the homepage of the Meituan app to browse and purchase all kinds of daily necessities. At around-the-clock next-generation shopping platform, Meituan InstaShopping works with millions of retailers, brands, and local small and medium-sized merchants We meet the daily shopping needs of more than 300 million consumers across the nation, delivering an unparalleled experience that gets high-quality products to consumers' hands within 30 minutes. This public brand debut is a direct response to the surging popularity of on-demand retail. We aim to offer main and to offer more high-quality products along with enhanced convenience and a more reliable shopping experience for every consumer. We also aim to jointly capitalize on the opportunity from industry transformation and supply chain upgrades with millions of merchants on our platform. As an important new sales avenue for retailers and brand owners, Meituan Instant Shopping will continue to introduce more online tools and support merchants across all categories to expand in Meituan Instant Mart, Meituan Shan Dian Chang. And these measures will help drive business growth for the merchant and enhance their online operations. And now let's turn to in-store. Adapted to the demand trends and the new macro environment, we have proactively expanded our product categories and services offerings to cater to the diverse consumer preferences. For example, in response to the evolving consumption trends, we rolled out initiatives like safe learning, that is , and safe training. that is Anxin Lian, providing more flexibility for consumers to restore consumer competence in prepaid services. Safe Learning has onboarded over 20,000 education institutions across the country, covering extensive education scenarios with courses spanning sports, arts, and other fields, Consumers can seamlessly place orders and redeem services in installments and request refunds when needed with a single click on our platform. Building on this success, we recently launched SafeTraining AnxinLian, which covers fitness training and extending this worry-free consumption model to broader in-store categories. Meanwhile, leveraging the efficient, user-friendly online tools, a wide array of marketing programs, we also help merchants reach a larger customer base with enhanced conversion rates, enabling them to benefit from digital transformation and achieve business growth across various consumption scenarios. The number of annual active in-store merchants increased by more than 25% year-over-year in Q1. And beyond offline merchants, our platform hosts numerous independent artisans, such as photographers, hair stylists, and aestheticians, etc., As a platform connecting artisans, merchants, and consumers, we introduced a suite of offerings for the artisans, from onboarding process, review management, content display, operation support, to consultation services. These services empower over one million active artisans to develop their personal brand online. We also streamlined collaborations between merchants and artisans while enabling consumers to easily access their preferred artisan with the broader selections and high price to value and distinctive service experience. And since integrating the medicine, medical, aesthetics, and healthcare business into the medical and health division, We have further enhanced cross-sells, deepened penetration into the industry supply chain, and delivered comprehensive medical and health solutions to consumers. During the peak flu seasons in the first quarter, we collaborated directly with the pharmaceutical companies to ensure sufficient drug supplies While solidifying our leadership in the on-demand medicine delivery, we expanded our supply to address the needs of chronic disease medicines and medical equipment and further increase the user purchase frequency. Meanwhile, we have extended a partnership with medical aesthetics providers, dental clinics, eye care clinics, specialty clinics, and traditional Chinese medicine hospitals and more. We targeted our existing user base to cross-sell more medical and health care services. For example, in dental care, we focused on deliberative consumptions, such as dental implants, and refined the price comparison experience and decision-making process for the consumers. We also introduced the safe implantation, the guarantee to mitigate consumers' concerns and risk. For iCare, through expanded supply and targeted marketing campaigns, we capitalized on the demand scenario of students renewing their eyeglasses during winter vacations, and travelers purchase sunglasses for holiday trips. And looking ahead, we will continue to innovate our products and services to meet consumers' evolving one-stop medical and healthcare needs. And at the end of March, we roll out the Meituan membership program, Meituan Huiyuan, which encompasses all our business categories. It features Shenzhen as a universal benefit, covering every aspect of consumers' daily lives. We aim to provide members with a wider array of benefits and elevated experience. Under this membership framework, users can accumulate growth points through the membership tiers and unlock additional privilege. Currently, the privilege mainly includes the hotel, travel, and various other local services categories. Going forward, we will continue to expand member benefits to more categories. Additionally, we will introduce tier-specific privilege such as priority delivery services for food delivery and free complimentary drinks and dishes for in-store, and to continuously enhance the user experience of Meituan membership. We anticipate to solidify the consumer mind-share in Meituan as the go-to platform to discover local stores and great deals through the new Meitang membership brand. By providing benefits that span all categories and scenarios, we seek to boost user stickiness, increase transaction frequency, and optimize cross-sell efficiency. And now let's move on to our new initiative segment. In first quarter, we further refined operations and achieved notable efficiency improvement in grocery retail, software and hardware services on year-over-year basis. Through grocery retail business like Xiaoxiang supermarket, Meitang Select, Meitang Youxuan, we started to offer comprehensive support for export enterprises and covering marketing channel expansion and brand partnership, and so on, to help them distribute high-quality export products in domestic markets. Our overseas business also witnessed a significant breakthrough in Saudi Arabia. Kita has very effectively showcased our product capability and technological edge By delivering an enhanced consumer experience in both transactions and deliveries, we have won wide recognition from local consumers and quickly rising as one of the top preferred food delivery apps in the region. And looking ahead to the rest of 2025, we remain steadfast in our commitment to fostering the healthy development of our ecosystem. On the merchant front, we will introduce more support measures, improve the online operational environment, and help merchant iterate innovative supply format. Regarding our couriers, we will offer a broader range of measures to safeguard their rights and enhance their benefits while promoting social recognition for their contribution. For our consumers, we are devoted to delivering more comprehensive services, products, and membership benefits, particularly to those who have been our loyal supporters over time. And by leveraging AI technology, we will continuously refine our user experience and improve merchant operational efficiency. And furthermore, we are proactively aligned with the national strategies aiming at boosting consumptions and expanding demand. By staying attuned to emerging consumption trends and identifying new markets and new opportunities, we will promote consumption growth and industry transformation, contributing to the broader economic landscape. With that, I will turn the call over to Shaohui for an update on our financial results.