Meituan Dianping Ord Cl B

Thank you for standing by, and welcome to the NAITUAN Second Quarter 2026 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 1 on your telephone keypad. I would now like to hand the conference over to Scarlett Xu, VP of Capital Markets. Please go ahead.

Thank you, operator. Good evening and good morning, everyone. Welcome to our second quarter of 2026 earnings conference call. Joining us today are Mr. Xing Wang, Chairman and CEO, and Mr. Shaohui Chen, Senior Vice President and CFO of Meituan. For today's call, management will first provide a review of our second quarter of 2026 results and then conduct a Q&A session. Before we start, we would like to remind you that our presentation contains four 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-IFIS accounting standard measures, please refer to the disclosure documents in the IF section of our website. Now, I will turn the call over to Mr. Xing Wang. Please go ahead, Xing.

Thank you, Scarlett, and hello, everyone. In the second quarter, our total revenue grew 14.4% year over year, and net profit turned positive. Both core local commerce and new initiatives deliver the solid results. We remain focused on our retail plus technology strategy, improving business quality and driving high quality growth across the industry. As they go to local services platform for consumers and merchants, our ecosystem continue to strengthen. We pushed forward with product and business innovations while stepping up investment in our ecosystem and technology to build a long-term value. We also expanded our grocery retail and overseas businesses with continued gains in operating efficiency. On the AI front, we made further progress in foundation models as well as in AI agent applications Now let me walk you through the details. In the second portion, the quick commerce industry shifted its focus to improving marketing and operating efficiencies. Again, this backdrop, our strong consumer mindset and core competitive advantages translated into healthier financial results. Order makes user quality continue to improve steadily For food delivery, whole user sickness strengthened further with purchase frequency retention and average order value all trending up. Meituan Instant Shopping maintained healthy new user acquisition with the post-2005 generation growing particularly fast, while existing users also increased their order frequency. Despite a high base from last year and evolving consumption trends, we actively pursued new growth opportunities, improving our supply offerings, strengthening product competitiveness, and deepening our understanding of user needs for different consumption scenarios. For food delivery, King Haofan improved its ability to identify consumer demand and accelerated rollout of heat products from chain merchants. Shen Changso continued to raise the bar on supply quality, catering to mid- to high-end consumer seeking quality upgrades. We also steadily expanded innovative store formats, such as branded satellite stores in Paiwei Xindian, creating incremental value for merchants. For Meituan Insta Shopping, Meituan Instamask maintained rapid growth and remained a key growth engine. Weimar Songzhou expanded quickly across the majority of provinces in China. It also launched more private label products. In June, it rolled out an anti-counterfeiting verification system to safeguard product authenticity for high-end retailers. and Songshu Bianli also accelerated its market penetration leveraging customized product development and factory partnership to enhance product competitiveness and better serve users in night times and travel scenarios we also took more proactive steps to strengthen our platform ecosystem deepening merchant support and empowerment. We continue to lead the industry in food safety governance and improve courier welfare. In Q2, we fully roll out 10 key initiatives under trusted food delivery, Fanxing Wanmai, establishing an end-to-end food safety system spanning four pillars, pre-onboarding screening, in-process monitoring, to crack down on fraud and illicit activities and collaborate public oversight. To address evolving industry needs, we launched the first comprehensive AI solution built for the quick commerce industry. We also scaled up AI-powered tools, helping merchants optimize their online operation efficiency. Around the peak holiday seasons, we supported 220,000 small and medium-sized restaurant merchants with funding, operational supplies, equipment upgrades, AI tools, and store renovations. In Q2, we also launched a special program to boost the demand in lower-tier markets and energized county-level economies. In the second half of the year, this program will expand to nearly 400 counties nationwide, helping over half a million small and medium-sized merchants digitize their operations. On courier welfare, we have expanded the occupational injury insurance program nationwide, covering every order and every courier. In addition, We continue to refine our algorithms, and just recently, we pioneered pause the clock and red light, Deng Ting Diao. Learning out of this feature, first in Beijing. Going forward, occupational injury insurance, pension insurance subsidies, and our critical illness care program for couriers and their families work together to form a robust and Comprehensive Welfare Framework. This quarter, we further strengthened our position as the preferred platform for local services, sustaining a high-quality growth across our in-store, hotel and travel business. Despite a changing consumer consumption environment and intensified industry competition, we continued to enrich our supply with more diverse, high-quality offerings while elevating the overall user experience. Meanwhile, we pushed the industry further from choosing the right merchants to choosing the right artisans and the right experiences. We saw a clear shift in local services consumption from standardized spending towards more personalized, Thank you for your attention. 264 cities and regions globally, with 120 newly added cities. Through genuine user recommendations, more long-standing local restaurants, special designing stores, and hidden culinary gems are being discovered. The master-based list Bi Wan Bang also continues to expand into more immersive, interactive, and interest-driven scenarios. We believe that in the AI era, authentic experiences, authentic reviews and authentic trust will continue to be the most vital infrastructure for the local services industry. And we will continue to strengthen our unique advantages in this area. In addition, We are leveraging AI to enhance both consumer experience and merchant operations. For complex local services decisions, consumers increasingly turn to Xiaotan, our AI assistant, built-in Meituan app. As assumptions grows, we are seeing a meaningful lift in user engagement on Meituan. We also continue to elevate the consumer experience with integrated services like PickUpNow, MiaoTi, or online reservations, advanced online ordering, smart queuing, and in-store smart ordering. These features give consumers a more seamless experience across a wider range of scenarios. Our partnership with Tencent is progressing rapidly with both teams refining the product to deliver faster, more convenient services. Beyond serving consumers, we are extending the advanced operational expertise across industries through AI agents. On the Catapult platform, we are rolling out specialized AI agents across restaurants, services retail, medicines and health, and hotels and travels. These AI agents help merchants in improving daily operations and driving tangible efficiency gains. This marked our evolving role from merchants' online channel to their AI business partner. Looking ahead, we want to be more than a platform that connects consumers and merchants. We aim to become a digital co-pilot for merchants on our platform. Now let's move on to new initiatives. In the second quarter, both Grocery Retail and Tita maintained a very rapid growth while further improving operating efficiency. For Grocery Retail, Shaoshan Supermarket accelerated its expansion and now operates across 68 cities. We continue to strengthen our supply chain and enhance our merchandising capabilities. We privately label products, accounting for a growing share of our GTV. We also expanded our offline footprint. In July, we opened our third Zhaoxian supermarket offline store in Hanzhou. We scaled the Happy Monkey model to serve community scenarios. with 40 stores in operation at upper Q2. And for key time, we sustained strong growth momentum alongside continued efficiency gains. By market, Hong Kong has reached stable profitability. The Middle East delivered further sequential improvement in operating efficiency. In Brazil, we focused on Sao Paulo market Going forward, we will continue to leverage our strengths in prod, technology, and operations to deliver a superior consumption and delivery experience to KITA users. Reflecting on the second quarter, our focus was on building full operational capabilities. We continue to enhance supply quality, expand consumption scenarios, and deliver high Thank you very much. We move decisively to capture these growth opportunities, continuously iterating on our products and services, and actively deploying AI in real-world consumption scenarios. Our goal is to further extend our competitive edge in supply diversity, user experience, and operational efficiency. At the same time, we remain committed to our social responsibilities Hello everyone.