To The Moon

After the release of Meituan's financial report, it opened down 4.95% this morning, and then turned from falling to rising, closing in red and even turning to rising.

On the news, Meituan announced its results for the three months ended March 31, 2025. The profit for the period was 10.057 billion yuan (RMB, the same below), a year-on-year increase of 87.33%. Adjusted net profit was 10.95 billion yuan, a year-on-year increase of 46.2%. During the period, the group's revenue was 86.557 billion yuan, a year-on-year increase of 18.12%.

CICC pointed out that Meituan's 1Q25 revenue increased by 18% year-on-year to 86.6 billion yuan, exceeding the bank's expectations by 1.4%; The adjusted net profit was 10.95 billion yuan, exceeding the bank's expectations by 21%, mainly due to the higher-than-expected core local commercial operating profits and better-than-expected operating losses of unallocated projects. The adjusted net profit rate was 12.6%.

Regarding the impact of JD.com's tens of billions of subsidies on Meituan's food delivery business, Meituan CEO Wang Xing responded that Meituan "will win the competition at all costs." As it "doesn't know how long the irrational competition of new entrants will last," it "cannot give accurate financial guidance for the second quarter and the rest of the year, but Meituan will continue to defend its market share."

Goldman Sachs lowered Meituan's revenue forecast for fiscal year 2025 to 2027 by up to 3%, and lowered its adjusted net profit forecast for fiscal year 2025 to 2027 by 34%, 16% and 10% respectively, reflecting that food delivery profits and valuations may be reset downward due to the industry structure. From a competition between two heroes to a competition between the top three. Maintain a buy rating on Meituan, but lower the target price from HK $200 to HK $172, because the company has profit recovery potential from fiscal year 2026, and it is expected that the high subsidies from Ali-W and JD.com will gradually normalize in the second half of 2025.

Options opportunities brought by Meituan's stock price volatility

Meituan released its financial report before the market opened, and the market initially reacted negatively.It opened down 4.95%, in a low mood. But then the market interpretation gradually turned positive,The stock price fluctuated and pulled up and finally closed up, rebounded from the lowest point of about 114.1 Hong Kong dollars to around 120 Hong Kong dollars during the day, and the overall increase was about5.2%。

Although this wave of reversal is not particularly violent, it has performed a "leverage miracle" in the options market.

We start withMeituan 250529 125 CALL(Call option with an expiration date of May 29 and an exercise price of HK $125) as an example:

• The price was only HK $2.5 at opening

• As the stock price rebounded, the option rose as high asHK $6.89

• Currently maintained at around HK $5

At current prices, achievedFully double the increase (+100%), while the underlying stock only rose about 5%.

This shows that:Options are extremely sensitive to short-term fluctuations, under the premise of effective direction judgment, the return far exceeds that of buying underlying shares directly.

Why use call options for short-term?

Advantages:

Strong leverage effect: Small funds leverage big gains and enlarge profits.

Limited risk: Buying a call option, the maximum loss is premium (HK $2.5 in this case).

Strong time sensitivity: Suitable for grasping news-driven short-term market trends, especially event-based transactions such as financial report days.

No need to use a large amount of principal to buy an underlying shares: More suitable for light warehouse participation and risk control.

Risks and disadvantages:

Loss time value: Especially near the expiration date, the value of time is rapidly lost.

The market needs to be realized quickly: If the stock price rises too slowly, the option may still cause losses due to the passage of time or hidden wave decline.

Less liquid options may have large bid-ask spreads: The deal is easy to slip.

Need to be accurate in judging volatility and direction: If the direction is wrong, the option value may quickly return to zero.

sum up

Like today's trend of Meituan, it is a typical script of "open low lures short positions, followed by subsequent reversal". For investors who can identify reversal signals during the session,Buying call options that expire in the current week not only has rich returns, but also clear and controllable risks。

Of course, this operation is more suitableShort-term trading player, rather than long-term investors. Understanding the volatility of option prices, the consumption of time value, and the management of mentality after buying are all keys to successfully using call options for short-term use.

Future earnings seasons, sudden negative news, policy disturbances, etc. may all bring similar "high volatility + high odds" opportunities. Appropriate participation within the scope of capabilities is an improvement of tool cognition and trading system.