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<Research>Citi Drops MEITUAN-W's TP to $204; Firm May Lift Subsidies to Counter Competition from JD-SW
Recommend 18 Positive 22 Negative 14 |
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According to a report from Citi, while MEITUAN-W (03690.HK)'s 1Q25 results are expected to be in line with both its and the market's forecasts, the focus will be on 2Q and full-year growth in food delivery volume, average order value, gross transaction value, revenue, rider costs, and the impact on unit economics. In Citi's opinion, JD-SW (09618.HK)'s initial food delivery sales mainly reflected broader user adoption, which was driven by the company's attractive discounts and subsidies that encouraged users to order drinks, snacks, and meals more frequently. This impact may be limited on MEITUAN-W's delivery sales in the near term, but the intensity of discounts, appealing rider compensation, and the waiving of merchant commissions could force MEITUAN-W to ramp up subsidies for users, riders, and merchants, and accelerate the rollout of rider incentives, which will in turn weigh on its revenue growth and unit economics. Citi lowered its target price for MEITUAN-W from $217 to $204, with a Buy rating remaining in place. AAStocks Financial News |
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