HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>After a tragic 61.4pp underperformance against the HSI in 2025, the market is almost unanimously bearish on <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, which presents opportunities in 2026.</li>
<li>Negative news did not push it further down; P/B is at over 1SD below average, and net cash-to-share price is 5.6pp above the historical average.</li>
<li>3Q25 margins are so depressed that sustaining the price war is difficult. As the 7th-heaviest HSI constituent, it is the one to move the Index next year. </li>
</ul>


After a tragic 61.4pp underperformance against the HSI in 2025, the market is almost unanimously bearish on Meituan (3690 HK), which presents opportunities in 2026.
Negative news did not push it further down; P/B is at over 1SD below average, and net cash-to-share price is 5.6pp above the historical average.
3Q25 margins are so depressed that sustaining the price war is difficult. As the 7th-heaviest HSI constituent, it is the one to move the Index next year. 


2026 High Conviction: Meituan (3690 HK) - Contrarian Perspectives

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Meituan (MT)’s revenue growth rate plummeted to 2% YoY in 3Q25.</li>
<li>The discount campaign has not actually ended after the authorities warned twice.</li>
<li>We expect that MT’s price has a downside of 30% in the next twelve months.</li>
</ul>


Meituan (MT)’s revenue growth rate plummeted to 2% YoY in 3Q25.
The discount campaign has not actually ended after the authorities warned twice.
We expect that MT’s price has a downside of 30% in the next twelve months.


Meituan (3690 HK): 3Q25, Discount Campaign Not Ended After Authorities Warned Twice

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>
Context: Volatility cones provide a clear framework to evaluate whether options are trading cheap or rich.</li>
<li>
Highlights: Implied volatility has increased across the board, but while some stocks recorded a 5-10% increase, other just added 1-2%. Upcoming November earnings start to shape the term structure.</li>
<li>
Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.</li>
</ul>



Context: Volatility cones provide a clear framework to evaluate whether options are trading cheap or rich.

Highlights: Implied volatility has increased across the board, but while some stocks recorded a 5-10% increase, other just added 1-2%. Upcoming November earnings start to shape the term structure.

Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.


HK Volatility Cones: Volatility on the Rise, Meituan and Ping An Historically Cheap

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

GigaDevice Semiconductor  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gigadevice-semiconductor-inc" target="_blank" data-smartkarma-citation="entities:27253:1" rel="noopener">GigaDevice Semiconductor (603986 CH)</a> (GD), an IC design house, aims to raise around US$1bn in its H-share listing.</li>
<li>GD is a leading specialty memory chip and MCU company in mainland China.</li>
<li>We have looked at the company’s past performance in our previous note. In this note, we talk about the recent updates and likely A/H premium.</li>
</ul>



GigaDevice Semiconductor (603986 CH) (GD), an IC design house, aims to raise around US$1bn in its H-share listing.
GD is a leading specialty memory chip and MCU company in mainland China.
We have looked at the company’s past performance in our previous note. In this note, we talk about the recent updates and likely A/H premium.


GigaDevice A/H Listing - PHIP Updates and Thoughts on A/H Premium

Equity Analyst - Asia Consumer Sector, Investory

Devi Subhakesan

Equity Analyst - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> shares fell 12.5% post - 2Q2025 results, reflecting investor concerns over prolonged subsidy wars and lack of visibility on when rational competition may resume.</li>
<li>2Q 2025 revenue growth lagged the pace of delivery transaction growth as incentives sharply reduced effective revenue capture while rising marketing costs nearly wiped out quarterly profit.</li>
<li>Along side the rapid growth in China’s instant delivery market, where groceries and daily essentials are delivered in 30 minutes or less, competition among leading retail/delivery players have escalated.</li>
</ul>



Meituan (3690 HK) shares fell 12.5% post - 2Q2025 results, reflecting investor concerns over prolonged subsidy wars and lack of visibility on when rational competition may resume.
2Q 2025 revenue growth lagged the pace of delivery transaction growth as incentives sharply reduced effective revenue capture while rising marketing costs nearly wiped out quarterly profit.
Along side the rapid growth in China’s instant delivery market, where groceries and daily essentials are delivered in 30 minutes or less, competition among leading retail/delivery players have escalated.


Meituan (3690 HK): Down 12% After 2Q25 - What Spooked Investors?

China

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

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Meituan (3690 HK)

2026 High Conviction: Meituan (3690 HK) - Contrarian Perspectives

The market's unanimous bearish stance on Meituan creates opportunities in 2026, given its low P/B and high net cash-to-share price. Margins are so...

Osbert Tang, CFA

Meituan (3690 HK): 3Q25, Discount Campaign Not Ended After Authorities Warned Twice

Meituan (MT)’s revenue growth rate plummeted to 2% YoY in 3Q25. The discount campaign has not actually ended after the authorities warned twice. We...

Ming Lu

HK Volatility Cones: Volatility on the Rise, Meituan and Ping An Historically Cheap

Volatility cones for 8 popular HK stocks help traders and investors spot opportunities. The IV term structure is increasingly shaped by the...

Gaudenz Schneider

GigaDevice A/H Listing - PHIP Updates and Thoughts on A/H Premium

GigaDevice Semiconductor (603986 CH) (GD), an IC design house, aims to raise around US$1bn in its H-share listing. In this note, we talk about the...

Sumeet Singh

Meituan (3690 HK): Down 12% After 2Q25 - What Spooked Investors?

Until there are tangible evidence of competitive discipline in China's on-demand retail sector, Expect stock is to remain volatile and range-bound.

Devi Subhakesan

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