On August 24, Meituan released its second quarter 2023 results announcement。The company achieved revenue of 68 billion yuan (RMB, the same below) during the reporting period, up 33.4%, exceeding analysts' expectations of $67.2 billion; net profit of $4.7 billion, net loss of $11.1.6 billion, year-on-year turnaround; adjusted EBITDA76.800 million yuan, exceeding analysts' expectations of 66.600 million yuan, up 102% year-on-year, a record high; platform instant delivery orders reached 5.4 billion orders, up 31% year-on-year..6%。

        

Take advantage of the recovery Dongfeng Meituan core business strong new business losses narrowed.

          

Overall, the financial results announced by the US group are quite bright.。Thanks to the strong recovery in consumption, both online and offline orders of Meituan ushered in an explosion in the second quarter, relying on the excellent performance of retail sales of goods and services to help Meituan turn around in the second quarter of this year.。

In response, Meituan CEO Wang Xing said, "Thanks to the arrival of the traditional consumption season, the company's businesses achieved healthy growth this quarter.。Meituan said in its earnings report that in the second quarter, as consumption continued to recover, the food delivery business ushered in strong growth.。The company meets the increasingly diverse needs of consumers by strengthening supply and optimizing subsidy strategies.。

On the revenue side, by business segment, Meituan's local core business revenue performance was strong, with revenue of 51.2 billion yuan in the quarter, exceeding analysts' expectations of 498.400 million yuan, up 39.2%。It is understood that the business segment includes Meituan's original food and beverage delivery and arrival, hotel and tourism segments, as well as Meituan's flash shopping, homestay and transportation ticketing business, which is the mainstay of Meituan's total revenue.。

Meituan said in its earnings report that the company's bright performance in its core business was mainly due to the following.

First, the strong recovery in consumption in the second quarter led to strong growth in the food delivery business, which was strong in both the high and low price bands。Taking this opportunity, Meituan actively guided merchants to double the number of arrivals year-on-year, which is conducive to expanding its merchant base and supply quality.。At the same time, Meituan also actively launched a variety of marketing activities to expand user participation, enhance user willingness to buy, improve user repurchase rate.。On the merchant side, expand its exposure and drain it。

Second, Meituan's flash sales were bright in the second quarter, with daily orders peaking at $11 million again.。During the reporting period, Meituan increased the number of active merchants by 30% year-on-year through holiday drainage and increased supply of goods and richness.。In addition, Meituan also actively assists merchants in online operations, providing them with traffic, subsidies and various marketing tools.。

Third, thanks to the continued recovery in offline consumption, Meituan's arrival, hotel and travel business recorded strong growth in the second quarter.。According to the financial report, during the reporting period, Meituan's business turnover increased by more than 120% over the same period last year, and the number of active merchants and annual trading users also hit a new high, helping Meituan's revenue climb in the second quarter.。

Fourth, Meituan's offline business also recorded a strong performance in the second quarter。On the one hand, with the continuous optimization of Meituan's product supply, the continuous improvement of consumer experience and the expansion of merchant business, the transaction volume of Meituan's to-store business increased significantly year-on-year.。On the other hand, as the domestic tourism industry continued to pick up, Meituan's hotel and tourism industry also saw strong growth in the second quarter.。

In contrast, the new business aspect of Meituan, while slightly inferior, also performed well: revenue from this business segment increased by 18% year-over-year..4% to $16.8 billion, net loss narrowed further by 23.5% to $5.2 billion, with operating loss improving to 31% month-on-month.。It is understood that the business segment includes Meituan's preferred, Meituan's grocery shopping, catering supply chain, online car-hailing, bike-sharing and other businesses, which is an important part of Meituan's revenue.。

Among them, due to the overall market growth rate will be lower than expected, the new business segment of the United States group preferred revenue growth rate has declined, the second quarter operating loss expanded month-on-month.。In this regard, Meituan said that Meituan preferred is still in the stage of scale expansion, the need for continuous investment subsidies, superimposed on the cold chain and logistics costs in hot weather, so the quarterly operating loss expanded month-on-month, but the long-term potential of the business to maintain confidence。

          

Cost reduction and efficiency gains help Meituan turn losses year-on-year

             

In terms of costs, according to the financial report, Meituan's cost of sales increased by 9% from $38.8 billion in the first quarter of this year..7% to $42.6 billion, as a percentage of revenue from 66.2% Decrease 3.6 percentage points to 62.6%。Meituan said the increase was mainly due to higher delivery-related costs due to an increase in the number of instant delivery transactions and higher sales costs in the merchandise retail business, partially offset by a decrease in rider subsidies due to good weather conditions.。The decrease in cost of sales as a percentage of revenue was mainly due to a decrease in the rider subsidy rate for the catering takeaway and Meituan flash sales business.。

Sales and marketing expenses increased to $14.6 billion from $10.4 billion in the first quarter of this year, as a percentage of revenue from 17..8% month-on-month growth 3.6 percentage points to 21.4%。Meituan said that both the amount and the percentage of revenue increased, mainly due to the recovery of consumption and changes in the business environment, resulting in increased transaction user incentives, promotion and advertising expenses, as well as increased employee benefits expenses.。

R & D expenditure R & D expenditure increased to $5.4 billion from $5 billion in the first quarter of this year, as a percentage of revenue from $8.6% month-on-month decline 0.6 percentage points to 8.0%。Meituan said that the increase in R & D expenditure was mainly due to an increase in employee benefits expenditure and the decrease as a percentage of revenue was mainly due to improved operating leverage.。

General and administrative expenses increased slightly to $2.1 billion from $2 billion in the first quarter of this year, mainly due to an increase in employee benefit expenses.。General and administrative expenses as a percentage of income from 3.4% month-on-month decline 0.3 percentage points to 3.1%, again due to improved operating leverage。

          

Meituan: expected to store wine brigade third quarter slowdown optimistic about Meituan flash sales in the next few years continue to grow

            

At the post-performance press conference, the US delegation responded to the concerns of all parties with a huge amount of information.。

For the excellent performance in the second quarter of the store wine travel business, Meituan said, very pleased that the market can see our store wine travel GTV growth of 120%, including our annual active merchants and annual trading users also reached a record high, in the quarter our business also hit a record high, especially offline consumption this recovery and actual spending are further enhanced, but also expanded our traffic, can bring more diversion to our content。

For consumers, we have further strengthened their minds that they can get low-cost, high-quality products on our platform.。Online platforms, including local services, have become a very important channel for merchants to obtain customers, especially in the wake of the epidemic, and we will further strengthen our operations and services to help merchants expand their activities and bring more convenience and value to our consumers.。

Looking ahead to the third quarter, Meituan believes that while the growth of wine tours to stores in the second quarter is indeed very large, it believes that overall volume growth may slow down by the third quarter and the overall business will be more resilient.。It is true that the impact on business in the third quarter due to extreme weather and other reasons can be seen, but the actual recovery in offline traffic and the development of the travel industry is still there, which can also help consumers' suppressed offline consumption can be further released online, and consumers' online consumption will be more frequent。

For the recent performance of Meituan flash sales, Meituan pointed out that Meituan flash sales have brought very strong growth, mainly because of the further increase in the penetration rate of our online products.。Meituan's flash purchases also cover more geographic areas and are repurchasing, and we have more and more regional brands, and we will also strengthen cooperation with merchants through methods like Meituan's Lightning Warehouse.。

Going forward, Meituan's flash sale business is expected to continue to grow in the third and fourth quarters of this year, both in 2023 and in the next few years.。Of course, we all know that last year Meituan flash purchase has a high base, after more than five years of business development, Meituan flash purchase words have shifted from the traditional growth demand to supply demand.。Merchants are also more active in embracing Meituan flash purchases, and we also have more new brand merchants to settle in, which can help us to further optimize the supply of brand resources.。

For the current concerns about the Meituan automatic distribution program, the company revealed that it has been testing automated transport vehicles from a long time ago, and now has completed regional business tests in Beijing and Shenzhen.。At the end of June this year, the number of orders completed through automated delivery vehicles had reached 3.3 million, and our automated delivery vehicles were also delivered to Shanghai during the epidemic, helping to deliver essential goods to residences, campuses and hospitals.。

At the same time, we have further optimized our software and hardware, as well as including our overall operations.。With the increase of our transportation volume and delivery volume, we also believe that the single volume of its delivery will be further improved in the later stage, and the cost will be lower and lower.。We will continue to optimize technology, continue to invest。Hope that in the future, automated distribution can become an important business, can better establish the city level of some efficient distribution network。From a long-term perspective, we believe that automated distribution vehicles can not only improve the efficiency of distribution, but also help to further help supplement capacity.。

Meituan continued to reveal that for drones, we started internal self-research in 2017 and officially launched in Shenzhen in 2021。So far, 170,000 orders have been fulfilled.。In July of this year, we also launched the fourth-generation drone distribution in Shanghai, and its safety and environmental adaptability further validated the feasibility of this model.。

The company believes that unmanned distribution systems can help us address peak season demand, especially in areas with high operating density in some cities.。In addition, drones can also meet the delivery of some special scenes, such as tourist attractions, natural theme parks。

Finally, Meituan said that for automatic distribution solutions, there are still many technical challenges, but also to meet the requirements of policies and laws and regulations, so I hope you can have a little patience.。We have been doing this business for 6-7 years, then we are very patient throughout the development process, and hope that our investors can be more patient.。