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<Research>UBS Expects Food Delivery Subsidy War to Peak in Aug; Valuations of BABA/ JD Attractive
UBS' recent expert conference call with the consumer goods team suggested that the subsidy war in the food delivery platform sector is expected to peak in August, potentially s...
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<Research>UBS Expects Food Delivery Subsidy War to Peak in Aug; Valuations of BABA/ JD Attractive
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65
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UBS' recent expert conference call with the consumer goods team suggested that the subsidy war in the food delivery platform sector is expected to peak in August, potentially shifting towards the instant e-commerce sector thereafter, according to UBS' research report.

Stimulated by subsidies, MEITUAN-W (03690.HK)  +1.800 (+1.434%)    Short selling $865.25M; Ratio 16.815%   and Ele.me saw their food delivery orders surge to 100-120 million and 63 million each in July, while JD-SW (09618.HK)  +3.700 (+2.972%)    Short selling $335.24M; Ratio 12.690%   remained at around 20 million orders.

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Experts predicted that, by the end of the year, MEITUAN-W aims to maintain a 60% market share of gross transaction value, with Ele.me 30%, and JD-SW 10%.

Meanwhile, BABA-W (09988.HK)  +3.300 (+2.933%)    Short selling $1.44B; Ratio 15.026%   planned to invest RMB50 billion in the quick commerce sector, aiming to bring Ele.me's order volume in line with MEITUAN-W's at 80 million per day, while JD-SW is expected to maintain cautious investment, stabilizing order volume at 15-20 million per day.

UBS believed that, in the short term, e-commerce stock prices may continue to fluctuate due to competitive uncertainties. Caution is advised for MEITUAN-W due to its higher valuation and potential earnings downgrade risks.

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In contrast, BABA-W, with reasonable execution ability, has greater potential for value release from synergies across different businesses, and its stock price has fallen to pre-DeepSeek level, making it attractive. As for JD-SW, its core business is expected to record a 2025 PE ratio of only 7x, maintaining competitive valuation.

In the catering industry, the broker was optimistic about YUM CHINA (09987.HK)  +11.000 (+2.988%)    Short selling $37.49M; Ratio 18.286%   and DPC DASH (01405.HK)  +1.350 (+1.498%)    Short selling $3.56M; Ratio 12.089%   . As the competitive landscape becomes clearer, the industry's value is expected to further emerge.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-07-18 16:25.)

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