Since reopening from zero COVID, Chinese consumers are behaving differently than before. They are spending more on domestic travel, dining, and value-for-money goods than the home appliances, new cars, and furniture purchases that characterized their preferences during the pandemic. In this new wave of spending, one company stands out from the crowd: Meituan. Although it is most well-known for food delivery, Meituan serves consumers in a variety of ways including travel, dining deals, experiences, and more. We believe Meituan’s recent results illustrate China internet earnings’ potential resilience to economic cycles.

In this edition’s theme highlight, we interview Meituan’s investor relations (IR) team to learn how Meituan is built for this moment in China. We also asked them about competition from short video platform Douyin, China’s version of TikTok, and what to expect from Meituan in the future.

China Internet Highlights:

• Revenue growth was particularly high for many of China’s largest internet companies in the second quarter due to a low base in the second quarter of 2022, when the nation was firmly under the zero COVID policy.
• Online retail sales increased +12.1% year-over-year (YoY) in August, far outpacing headline retail sales growth of +4.6%.¹
• This year’s Asian Games, Asia’s version of the Olympics, held in Zhejiang Province, was the first international athletics tournament to include E-Sports as a medal category,² reflecting the maturing that the E-Sports industry has undergone over the past decade from a fringe, specialist activity to a globally recognized competitive endeavor.

China Internet Sector Earnings Report Contents:

• China Internet Recent Highlights
• Subsector Analysis
• Theme Highlight – Meituan: Capturing The Sweet Spot In China’s Recovery
• KWEB Top 10 Holdings Earnings Update

1. Data from National Bureau of Statistics of China and FactSet as of 31/Aug/2023.
2. Yeh, Nadja. “China kicks off the Asian Games with no fireworks and a parade of global leaders,” The China Project. 25th September, 2023.

This is a marketing communication. Please refer to the prospectus of the UCITS, the KIID, and the PRIIP before making any final investment decision.