Goldman Sachs has issued a report predicting that the market would have a mixed reaction to MEITUAN-W's (03690.HK)  -1.700 (-1.287%)    Short selling $2.38B; Ratio 20.042%   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.

Related NewsRatings & TPs on MEITUAN-W (03690.HK) (Table)
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)  -1.600 (-1.247%)    Short selling $636.23M; Ratio 26.490%   '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)  -2.200 (-1.864%)    Short selling $366.09M; Ratio 5.917%   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 2025-05-27 16:25.)