Daily Investment Strategy
Daily focus：Meituan (3690)
Meituan recorded revenue of RMB 95.5 billion in the third quarter, a year-on-year increase of only 2.0%, slightly below market expectations. The company's performance swung from profit to loss during the period, with an operating loss of RMB 19.8 billion and an adjusted net loss of RMB 16 billion, a significant decline compared to a profit of RMB 12.8 billion in the same period last year. This was mainly due to high subsidies and promotional expenses resulting from intensified competition in the food delivery industry. Looking ahead, management expects core business and group-level operations to continue operating at a loss in the fourth quarter, but noted that the third quarter saw the peak of subsidies. While new business efficiency has improved, continued overseas expansion and AI investment are increasing cost pressures. When the company can return to profitability will depend on changes in the competitive landscape and adjustments to its subsidy strategy.
China PMI
China's National Bureau of Statistics released the Purchasing Managers' Index (PMI) for November. The manufacturing PMI remained below the expansion/contraction threshold for the eighth consecutive month, but rose slightly to 49.2 from the previous month. Most sub-indices recorded positive improvements, with new orders and new export orders rising by 0.2 and 1.7 points respectively to 49.2 and 47.6. Meanwhile, the purchase price of major raw materials remained in expansion territory for the fifth consecutive month, reflecting rising production costs. On the other hand, the services PMI, which had remained slightly above the expansion/contraction threshold for the past 10 periods, reversed course and entered contraction.
Hong Kong Stock Connect saw a net inflow of HK$2.73 billion on Friday, with Alibaba (9988) experiencing the largest net inflow at HK$1.09 billion, followed by Pop Mart (9992). Conversely, SMIC (981) recorded the largest net outflow at HK$300 million, followed by Zijin Mining (2899).
Leung Kai Tong is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to https://apps.sfc.hk/publicregWeb/indi/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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