Goldman Sachs has issued a report predicting that the market would have a mixed reaction to MEITUAN-W's (03690.HK)  +6.500 (+4.947%)    Short selling $1.22B; Ratio 20.856%   better-than-expected 1Q25 results.

While MEITUAN-W's core local commerce profits in 1Q initially exceeded expectations, the competitive landscape in food delivery will intensify starting from 2Q, resulting in increased delivery subsidies (especially for MEITUAN-W since May) that will have a significant short-term impact on profits from the company's food delivery business.

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In addition, Goldman Sachs acknowledged in the report that the industry landscape will become more fragmented in the medium term with JD-SW (09618.HK)  +1.200 (+0.949%)    Short selling $88.72M; Ratio 10.626%   's commitment to its food delivery business. Accordingly, the broker lowered its target for MEITUAN-W's average normalized food delivery gross transaction margin for 2025-27 to 2.5% from 3.2%, reflecting the slightly heightened competition.

Goldman Sachs kept a Buy rating on MEITUAN-W but axed its target price from HKD200 to HKD172, considering that the company's potential for profit recovery starting from FY26 as the heavy subsidies from BABA-W (09988.HK)  +0.900 (+0.778%)    Short selling $426.93M; Ratio 11.068%   and JD-SW are expected to gradually normalize in 2H25.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-05-29 12:25.)