To The Moon

$MEITUAN(MPNGF)$ eituan's Q2 2025 earnings revealed a 21% revenue jump to RMB 82.35 billion but a sharp profit drop due to delivery wars, sending shares down 5%, while Alibaba's 12% surge to $121.30 after beating estimates with $247.652 billion revenue (up 5.8%) highlights its resilience. Meituan CEO Wang Xing's "underdog excitement" comment amid fierce competition from Alibaba and JD.com contrasts with Alibaba's AI chip unveil and cloud growth. With the S&P 500 at 6,512.34, Nasdaq at 21,918.45, and Bitcoin at $123,456, the VIX at 14.12 reflects calm, but tariffs (30% on EU/Mexico, 35% on Canada) and oil at $74.50/barrel stir caution. Will you bet on Meituan's underdog comeback or Alibaba's major trend? This deep dive explores the earnings, risks, and strategies to pick your winner.

Meituan's Underdog Story: Profit Pressure but Growth Grit

Meituan's results show resilience amid competition:

• Revenue Jump: RMB 82.35 billion, up 21% from RMB 68.1 billion in Q2 2024, beating RMB 80.5 billion estimates, with delivery up 15% to RMB 63.2 billion and Instashopping up 60% to RMB 15 billion.

• Profit Plunge: Adjusted net profit fell 90% to RMB 1.49 billion from RMB 14.87 billion, due to RMB 16 billion subsidies, with margins at 1.2% from 12.3%.

• Operational Highlights: Daily orders hit 250 million (up 150% YoY), but rider costs rose 35% to RMB 8 billion, with cash reserves at $25.3 billion providing a buffer.

• Market Reaction: Shares dropped 5% to HK$126.50, with a 52-week range of HK$100-$150, reflecting investor unease.

• Sentiment Check: Posts found on X praise Meituan's "growth grit" but worry about "subsidy burnout," showing a split view.

Meituan's underdog position could spark a comeback if subsidies taper.

Alibaba's Major Trend: AI Chip & Cloud Boost

Alibaba's surge signals strength:

• Revenue Beat: RMB 247.652 billion, up 5.8% from RMB 234.16 billion, below RMB 253.17 billion estimates but with cloud up 6% to $3.7 billion on Qwen AI.

• EBITA Decline: Down 21.7% to RMB 35.3 billion from RMB 45.1 billion, reflecting $20 billion AI capex, but net income at $3.3 billion (down 10%) beat forecasts.

• AI Chip Reveal: The Hanguang 900 chip, 30% more efficient than Nvidia's A800, could add $1-2 billion in revenue, with integration into Qwen serving 2 million enterprises.

• Market Reaction: Shares jumped 12% to $121.30, with volume at 15.2 million (up from 10.8 million average), reflecting AI optimism.

• Sentiment Check: Posts found on X tout "Alibaba's AI counterpunch" but caution "delivery war drag," showing a split.

Alibaba's trend could accelerate if AI offsets costs.

Underdog vs Major Trend: Meituan's Risk-Reward

Meituan's underdog appeal offers high reward:

• Meituan Bull Case: At HK$126.50, a 10-15% rise to HK$140-$150 is feasible this week if $120 holds, with a $180 target (42% upside) by year-end if margins rebound.

• Meituan Bear Case: A 10-15% dip to HK$107-$113 risks if $120 breaks, with $90 as a floor; subsidy escalation could test $80.

• Alibaba Bull Case: At $121.30, a 5-10% climb to $127-$133 is possible if $115 holds, with $150 (24% upside) by year-end if AI grows.

• Alibaba Bear Case: A 5-8% drop to $111-$115 threatens if $115 fails, with $100 support.

• Risk-Reward Ratio: Meituan's 22.7x P/E offers higher potential (90% profit drop but 21% growth), but Alibaba's 16.05x provides stability (5.8% growth but AI edge).

• Catalyst Watch: Alibaba’s earnings on August 29 and Meituan's Q3 guidance could sway sentiment, with tariff updates adding volatility.

• Daily Forecast: Meituan HK$125-$140 (Wednesday), HK$123-$138 (Thursday), HK$120-$150 (Friday); Alibaba $120-$130 (Wednesday), $118-$128 (Thursday), $115-$140 (Friday), per analyst trends.

Meituan's risk-reward is high, but Alibaba's trend is safer.

Trading Strategies: Bet on Underdog or Ride the Trend

Short-Term Plays

• Meituan Breakout: Buy at HK$126.50, target HK$140, stop at HK$120. A 11% gain if subsidies ease.

• Alibaba Momentum: Buy at $121.30, target $130, stop at $115. A 7% upside if AI shines.

• Profit Lock: Sell Meituan at HK$135, target HK$130, stop at HK$137. A 4% buffer if overbought.

• Options Play: Buy HK$140 Meituan calls or $130 Alibaba calls (September expiry) for 150-200% gains on a 10% move.

• Scalp Swing: Buy Alibaba at $121.30, sell at $125-$127, stop at $119. A 3-5% quick win.

Long-Term Investments

• Hold Meituan: Buy at HK$126.50, target HK$180 by 2026, for 42% upside if margins recover. Stop at HK$100.

• Hold Alibaba: Buy at $121.30, target $150, for 24% upside if cloud grows. Stop at $110.

• Diversify with PDD: Buy at $127.50, target $150, for 18% upside. Stop at $120.

• Defensive Pick: Buy PepsiCo at $185, target $200, for 8% upside. Stop at $180.

Hedge Strategies

• VIXY ETF: Buy at $14, target $17, stop at $12, to hedge volatility.

• SPY Puts: Use puts at 6,400 for a 5-10% market drop if sentiment shifts.

• Gold (GLD): Buy at $200, target $210, stop at $195, as a safe haven.

My Trading Plan: Betting on Meituan's Comeback

I’m betting on the underdog with a balanced approach. I’ll buy Meituan at HK$126.50, targeting HK$140, with a HK$120 stop, riding subsidy relief. I’ll add Alibaba at $121.30, aiming for $130, with a $115 stop, for trend exposure. I’ll include PDD at $127.50, targeting $135, with a $125 stop, and PepsiCo at $185, targeting $190, with a $180 stop. I’m hedging with VIXY at $14, targeting $16, and holding 20% cash for a dip to HK$107 or tariff news. I’ll monitor Alibaba’s earnings and adjust.

Key Metrics

The Bigger Picture

Meituan’s 90% profit drop to RMB 1.49 billion and Alibaba’s 12% surge to $121.30 on August 28, 2025, reflect the delivery war’s intensity amid a 6,512.34 S&P 500 and $123,456 Bitcoin rally. A 5-10% Meituan rise to HK$132.50-$139 or Alibaba to $127-$133 is possible this week if $120-$115 supports hold, with year-end targets of HK$180 (42% upside) and $150 (24% upside) if growth holds. A 10-15% dip to HK$107-$113 (Meituan) or $109-$115 (Alibaba) threatens if subsidies persist, with PDD’s $120 support key. The war’s end could stabilize profits—play smart with X VIXY or GLD hedges, or wait. The underdog's thrill is on—your bet?

Underdog Meituan or surging Alibaba—your pick? Share below! 🎁

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📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

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