Meituan Dianping Ord Cl B

Thank you for standing by and welcome to the Mituan Third 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 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 Zhu, VP and Head of Capital Markets. Please go ahead.

Thank you, Teresa. Good evening and good morning, everyone. Welcome to our third quarter of 2025 earnings conference call. Joining us today are Mr. Hsing Wang, Chairman and CEO, and Mr. Xiao Hui Chen, Senior Vice President and CFO of Meituan. For today's call, management will first provide a review of our third 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-IFIS 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 IFIS accounting standards. For a detailed discussion of risk factors and non-IFI accounting standard measures, please refer to the disclosure document in the IF section of our website. Now I will turn the call over to Mr. Xinhua. Please go ahead, Xinhua.

Thank you, Scarlett. Hello, everyone. We are in the third quarter. we actively responded to the shift in the competitive landscape of food delivery and quick commerce. Meituan maintains, remains the go-to platform of local services for Chinese consumers. Over 800 million consumers use our services, covering everything from food and dining, quick commerce, to services retail and more. Specifically, The Meituan Apps DAU jumped over 20% year-over-year in the third quarter. On average, users transact with us at least once a week, and our top-tier and high-quality users engage with the platform every day. Across all local commerce businesses, we have stepped up product and service iteration to enhance user mindshare and strengthen our competitive advantages. Thanks to our fully upgraded Meitang membership, Meitang Huiyuan, we have effectively boosted for-selling activities and enhanced core user stickiness. We are also the primary platform for merchants' long-term growth, empowering them with the technology and supply innovations. and helping them to integrate AI into their operation to improve efficiency. First, let's talk about our food delivery business. Here, we continue to leverage our competitive strengths to deliver industry-leading operational efficiency and a superior consumer experience. Our sustained focus on service quality and the healthy development of the industry has enabled us to navigate a quite dynamic market, strengthen our consumer mindset, and reinforce our leadership in the food delivery sector. Amid intense competition, we stepped up supply-side innovation and service upgrades. For our innovative supply models, like Ping Hao Fan, or as branded satellite stores. And we further deepened our collaborations with quality merchants. It allows us to offer consumers a wider range of high-quality products across all price bands. And we also selected top-tier restaurant merchants on based on real and authentic data. and matched these quality offerings precisely with our high-quality food delivery users. Additionally, we have rolled out premium services like on-time guarantee and one-to-one express delivery. These measures have strengthened our core competitiveness in fulfillment and elevated the delivery experience for consumers. and solidified our advantage in user structures. We remain as the Chinese consumer's go-to food delivery platform. In the third quarter, both DAU and MTU as monthly transacting user for food delivery hit an all-time high. We further expanded our advantage in user structures. In addition, we stuck up our efforts to address ecosystem issues and invested in the ecosystem development. Specifically for courier's welfare, we expanded the Courier Pension Insurance Subsidy Program to nationwide coverage beginning in November and extended an occupational injury insurance to 17 provinces and cities. We have also implemented a comprehensive career welfare scheme, which include critical illness support, educational funds for career students, and skill development and academic advancement opportunities for careers, as well as benefits such as work meals health checkups, and travel subsidies. Moreover, we have built courier homes, shizhouzijia, and rest stations across the country to provide our couriers with convenient facilities and services. Going forward, we will keep enhancing couriers' welfare and protection. And as consumers preferred QuickCommerce platform, Meituan Instant Shopping continues to lead the industry's rapid growth and service upgrade. In Q3, both new user growth and core user purchase frequency further increased. As we continue to diversify supply, the proportion of user buying across multiple categories has been steady on the rise. This shows our everything-now consumer mindset is getting even stronger. New spread formats like Meta and Instamart, Shandianshan, expanded rapidly, bringing this high-certainty lifestyle to more regions across China. We also teamed up with the leading brands in the liquid and apparel categories. which reflects these top brands' recognition of QuickCommerce's value and their trust in Meituan. In October, we officially launched a branded flagship Instamart, Dingpai Guanqi Shandiancang, providing retail brands with full QuickCommerce infrastructure, warehousing, on-demand delivery, and a digital system. By leveraging our strengths in user traffic, ecosystem, and online capabilities, we empowered brands to drive user growth, boost sales, and connect more deeply with younger consumers. Beyond that, we are committed to continuously upgrading our quick commerce services. After rolling out the industry's first full-cycle service assurance program, Anxingshan Go. We recently introduced an end-to-end authentic product verification process for Chinese Ricoh and launched the industry's first alliance for high-quality fresh-cut fruit brand, Wojie. As the industry leaders, we will keep setting benchmarks that focus on premium quality and top-tier service. Overall, we have built the world's largest and most efficient intra-city on-demand delivery network, delivering a best-in-class fulfillment experience to consumers. Our platform has accumulated a large base of high-quality users with very strong purchasing power. We also provide merchants with industry-leading services and create the most diverse supply These valuable assets built up over more than a decade will fuel the long-term growth of our food delivery business. They will also serve as a solid foundation for our efficient expansion in the broader quick commerce space. Now let's turn to our in-store business. In the third quarter, Both our merchant base and user base reached new highs with a nearly 20% year-over-year increase. And user transaction frequency continued to grow robustly. We further refined our product and content ecosystem. Our goal is to give every consumer simple, more reliable reference for purchase decisions. To date, Our platform has accumulated over 20 billion authentic user consumer reviews, with nearly 3.5 billion new reviews added in the past 12 months. Additionally, we are now using AI to field out low-quality reviews and those manipulative contents. This way, we can ensure a comprehensive authentic review ecosystem that provides a truly useful decision-making support for consumers. We also expanded the reach and influence of our high-quality lists, including the Black Pearl Guide, Heizhenzhu, and our must-eat list, Bishiba. Currently, these two lists cover 34 and 144 cities, respectively. Moving forward, we will expand to more regions and welcome more quality restaurants to join our list. Beyond that, we have iterated products like Pick Up Now, MiaoTi, smart ordering, one-click payments, extending coverage to more merchants, and meeting consumers' more diverse and personalized needs. Moreover, we further promoted our safe learning program in the broader education space and expanded our safe series to more categories such as fitness. We offer flexible redemption options, which has significantly boosted consumer trust in prepaid services. For self-service formats such as an unmanned chess and playing cards rooms and self-service KTV, we upgraded our booking system to deliver a smoother, hassle-free experience for consumers from reservation all the way into service fulfillment. In healthcare and pharmaceuticals, We expanded our video and phone consultation services to include more doctors from grade 3A hospitals, and we offered 24 by 7 instant consultations, plus 30 minutes prescription drug delivery. We improved in-store verification service for dental care and medical aesthetics, and standardized supply chain management to build end-to-end consumer trust. During the third quarter, we launched the 2025 Polaris Medical Aesthetic Guide , which set industry standards and raises the bar for services quality. These are just a few examples Going forward, we will continue to leverage our deep industry and consumer insights to turn more offline services transactions into trusted online transactions for consumers. And now let's turn to our new initiative segment. And this segment delivered another solid performance in the third quarter. Our grocery retail businesses, especially for Xiaoxiang supermarkets and Kuailui, sustained a strong growth momentum. We not only solidified our market position, but also achieved improvement in operational efficiency. And additionally, Kita accelerated its global coverage After launching in Qatar in August, we entered Kuwait and the UAE in September, deepening our presence in these key Middle East markets. In October, Kita also kicked off a pilot operation in Brazil. Going forward, we will continue to leverage our strength in product, technology, and operation know-how to deliver superior consumer delivery experience for consumers in more parts of the world. After six months of iterating and promoting Meituan membership, we have achieved good progress. We added new member benefits and exclusive offers across multiple local service categories. This has notably strengthened our user management and boosted member transaction frequency. Specifically, a large number of our mid-tier users have upgraded their membership tiers and the number of high value members kept growing steadily even in the recent very fierce competitive environment. It's a clear sign of our unique edge in serving high-value users. What's more, our enhanced meta-membership program is driving growth across businesses in key areas. It supports user acquisition and traffic operation and transaction growth and marketing while also effectively fueling process selling among various businesses and consumption scenarios. Moving forward, we will leverage our competitive advantages and broad coverage in local services, continue to refine the membership program, and increase user engagement and transaction frequency. During the third quarter, we continued to invest in AI and achieved multiple milestones. For example, we launched several models in our Long Cat Flash series, all delivering leading performance. And we rolled out a range of AI decision-making and application tools tailored specifically for restaurant merchants. And we also launched a Xiaomi app a smart life assistant for consumers, and currently is in large-scale testing. Going forward, we will make our AI tools more industry-focused and services-oriented. We will provide effective solutions for merchants across all operational decision-making scenarios and make consumers' decision-making process and consumption experience more intelligent, more convenient, and more personalized. Founded in 2010, Meituan has witnessed and led the digital transformation for China's local service industry. Since 2010, we have built the online purchase, offline consumption, user management in local services through group purchase model. Back in 2013, we stepped into the food delivery space, and our intra-city on-demand delivery network made food delivery services more accessible than ever, turning it into a key food consumption habit for Chinese consumers. And as leading industrial competitive and as the industry competition keeps evolving, we are confident in maintaining our leading position by continuing to strengthen our core competitiveness. Guided by our retail plus technology strategy, we will continue to refine our products and services to better meet consumers' very diverse local services needs while empowering merchants through technology innovation and AI application, all together to drive the sustainable and healthy development of the whole industry. So we are as ever committed to helping people eat better, live better. And with that, I will turn the call.