Thank you, operator. Good evening, and good morning, everyone.

Welcome to our second quarter 2021 earnings conference call. Joining us today are Mr.

Xing Wang, Chairman and CEO; and Mr. Shaohui Chen, Senior Vice President and CFO of Meituan.

For today’s call, management will first provide a review of our second quarter 2021 results and then conduct a Q&A session. Before we start, we would like to remind you that our presentation contains forward-looking statements, which include a number of risks and uncertainties, and may differ from actual results in the future.

This presentation is based on our management accounts, which has not been audited or reviewed by our auditor. This presentation also contains unaudited non-IFRS financial measures that should be considered in addition to, and not as a substitute for measures of the company’s financial performance prepared in accordance with IFRS.

For a detailed discussion of risk factors and non-IFRS measures, please refer to the disclosure documents in the IR section of our website. Now, I will turn the call over to Mr.

Xing Wang. Please go ahead, Xing.

Thank you, Scarlett, and hello, everyone. Welcome to Meituan’s second quarter 2021 earnings call.

In the second quarter of 2021, our various business segments remained healthy growth as the Chinese economy continued to recover steadily and as we continue to digitize the offline and service economies. In Q2, annual active merchants and annual transacting users saw faster year-over-year growth versus Q1 reaching 7.7 million and 728 million [sic] 628 million, respectively.

The average number of transactions per transacting user increased to 32.8 times for the trailing 12 months of Q2 2021, compared to 25.7 times for the trailing 12 months of Q2 2020. We served more merchants and helped accelerate their -- business digitization.

We also strived to better serve consumers, providing them with a more diversified, more convenient and more valuable money services and products. As a technology platform, we will continue to use our technology-empowered system to improve offline business and supply chain efficiency, creating a more commercial and social value in return.

At the same time, we will continue to develop our business around the mass market consumer, while fulfilling our mission to help people eat better and live better. Now let’s start with food delivery.

We continue to bring a wider range and greater quantity of merchants online to better meet the consumers’ increasing diverse needs. In Q2, our total food delivery orders grew by close to 60% year-over-year with a two-year CAGR of more than 30% as measured from the second quarter of 2019.

On the consumer side, we continue to broaden the variety of consumption scenarios available on our platform, provide the longer-distance deliveries and implement a more targeted operational strategy for merchant to better meet the consumer growth need of food delivery. By the end of June, food delivery annual transacting users had increased by 16% year-over-year, with most of the new additions coming from lower-tier markets.

Meanwhile, our monthly membership subscriber base also continued to hit new records, reaching over 59 million as of the end of Q2 and accounting for an ever larger proportion of our total food delivery orders. They are scaling up.

Consumers are also transacting more frequently on our platform, with quarterly purchase frequency up 25% year-over-year. In addition, order contribution from the breakfast, afternoon tea and late-night snacks categories also grew meaningful, with orders for our long-distance merchants contributing to a greater percentage of the total orders in Q2.

On the merchant side, we are focused on helping merchants to run their online business more efficiently by conducting constructive and transparent dialogues with the merchants, we were able to better understand their business pain points and collect their firsthand feedback. Food delivery annual active merchants and annual active advertising merchants, both reached new highs in Q2.

Since May, we have been rolling out a new tiered pricing mechanism for merchants. It not only made pricing and cost structures more transparent for merchants, but also provide the merchants with more flexibility in delivery options.

We believe this mechanism should help optimize the food delivery industry’s operation over the long run. We also launched the Food Delivery Manager [Foreign Language] the program to better support the small or medium restaurants.

This program is focused on helping restaurant set up and use online operations covering such areas as operational diagnosis, operational optimization, store renovation, menu design, event planning, marketing and more. Results were notable as more than 6,000 merchants participated in the program and saw their average GTV grow by more than 50% versus 54%.

For the smaller merchants, we have continued to witness a trend of acceleration in their adoption of digital and online solutions. The less dining-in and more delivery service business model has worked well for smaller restaurants in our merchant ecosystem.

We will continue to support the larger -- the larger number of small and medium merchants on our platform by helping them to acquire more consumers, know their operating expenses and increase their operational efficiency. In terms of our delivery network, in Q2, we came up with a more differentiated delivery solutions for different merchant groups and consumption scenarios, while continuing to strive toward delivering quality consumer services, including our delivery efficiency.

Our delivery services also expanded for more merchant type from food to medicine, supermarkets, convenience stores and so on. In the first half of this year, we hosted more than 85 panel feedback sessions with delivery riders, through which we collected feedbacks and incorporated into our operations to further enhance our delivery riders’ welfare.

Over the past few quarters, on the back of our efforts to support delivery riders’ family, we further upgraded our Baby Kangaroo [Foreign Language]. The program was designed to -- specifically to improve the well-beings of our delivery riders’ children.

Our other welfare programs also help delivery riders’ families in times of need and sickness. To have riders with a long-term career planning, we initiated Delivery Station Manager [Foreign Language].

And through this program, high potential delivery riders have the opportunity to become managers and assume more responsibilities. We are a technology company, so the research and development of cutting-edge technology is key to our business.

In the future, to provide our delivery riders with a more assistance, further improve delivery efficiency, we aim to stimulate our self-developed autonomous delivery vehicles and delivery drones into our delivery network. During recurrence of COVID-19, for example, we flew our delivery drones in Shenzhen’s Nanshan district to provide the quarantined community with a much needed daily necessities.

And our autonomous delivery vehicles operated in cities such as Chengdu, Nanjing, Guangzhou, delivering grocery during the pandemic, as well as in addition to Beijing Shunyi district, where we had been running the part of the program since the onset of the pandemic. Now let’s move on to our second segment.

Our in-store, hotel & travel segment recorded a steady growth in Q2. During the period, we have focused on building out our long-term capabilities in order to better serve merchants and consumers, ultimately helping to recover a gross domestic consumption.

We also leverage the different holidays and vegetables and launch categories specific promotional campaigns, which resulted in record transaction volume at GTV merchant’s number for our in-store business in Q2. We maintained a distinctive and strong consumption Meituan at the go-to destination for exploring local lifestyles, as well as discovering quality merchants value-for-money services.

For in-store dining, our GTV achieved two-year CAGR for more than 37% in Q2, accelerating from that of Q1. We also brought a more high quality and light meal options online and launched a more transaction-based advertising products by provide the merchants with a more differentiated operational strategies, we help them to better run their online and offline businesses.

Our merchant’s supplies increased diversity and also attracted consumers to dine out and transact more in restaurants during the consumption recovery. As annual active merchants continue to hit a record high, consumer transaction potency and user stickiness also improved.

For other in-store services, GTV achieved a two-year CAGR of close to 47% in Q2, as categories such as medical, aesthetics, pet care and healthcare maintained their high growth rate. We also leveraged the various vegetables and campaigns to bring more high quality merchants online.

That is tie in a growing consumer needs. During the June 18th festival for Medical Aesthetics category, GTV a number of transaction both grew by more than 70% year-over-year during the promotional periods.

We also ramp up our staff-owned business development team to cover more categories in broader lower tier markets, increasing the number of annual active merchants in turn. We believe for these lower tier markets, the need of both consumers and merchants have yet to be optimally match and there is still ample room for both the industry digitization.

So, going forward we will focus on that approach in appropriate the markets, while also improving our products and operations to reach more consumers. And for hotel booking, the intention and demand for travelling was stronger in Q2 versus Q1.

This resulted in a higher quality quarterly domestic room nights of more than RMB114 million on our platform, with the daily peak for the Labor Day holiday, reaching more than RMB4 million. We also continued to strengthen our ability to provide our high-star hotel segment, with the better services and supplying.

For low-star hotels, we have solidified our leading position and continued to penetrate further into lower tier markets through the accelerated digitization process and offline traffic conversion. And next for our new initiative segment, we continued to invest in key initiatives, especially retail.

In Q2, Meituan Select expanded our geographic coverage in China, while also deepening its penetration into the lower tier markets. At the same time, we increased our coverage of those counties that are less well-off providing, hundreds of thousands of villages opportunities to work as group leaders, increased these residents income.

For those who left their villages and now work in larger cities, Meituan Select rolled out a statistical program that enabled them to conveniently order groceries for their parents back in their hometown with just clicks of a button. Orders from this channel exceeded millions in just one month.

We also achieved a solid user growth by incrementing new acquisition methods, which included programs to build strong consumer consummation and improved user experience. And during the summer, we build out our nationwide whole chain logistic to improve our product quality and user experience, as well as further enabling the quality delivery of fresh produce.

Going forward as we continue to channel our resources into developing our long-term capability in food products, supply chains and logistic networks, we will also further improve our operating efficiency. Importantly, we will abide by regulatory guidelines for business development and have to facilitate a healthy, orderly and competitive environment.

For Meituan Instashopping, we continued to increase the number of our merchants and categories offered to our platform. By deepening our relationship with FMCG brands directly, we are helping them to achieve more efficient marketing and wider distribution.

On our Meituan’s vertical, we launched the Yellow Light project in Q2. By working with over 10,000 drug stores, pharmacies, we can deliver medicine on 24 hours a day and seven days a week basis and it solves people’s most urgent medical needs at home.

As we increase our brand awareness, Meituan Instashopping’s user growth accelerated, with its quarterly number of transactions and GTV growing north of 140% year-over-year. Average daily transactions have reached RMB3 million in Q2 and during the most recent Chinese Valentine’s Day, Meituan Instashopping reach the peak daily transactions of more than RMB6 million.

For Meituan Grocery, we completed our coverage expansion of existing Tier 1 cities, that’s Beijing, Shanghai, Guangzhou and Shenzhen in Q2, growing GTV by over 280% and quarterly transacting user base by over 250 year-over-year. We also optimize our product structure and improved our warehousing and delivery and logistics.

Importantly, we were able to increase the segment order density warehouse, while also ensuring an optimal user experience. Going forward, to improve our long-term unit economics, we will continue to enhance our supply chain and logistic capabilities, as well as our operating efficiency.

As China’s leading e-commerce platform for services, we have actively worked on shouldering more social responsibility and creating greater value, while promoting common prosperity for the larger society, including our delivery riders, merchants, consumers and other business partners. In Q2, we strengthened our long-term capabilities to have consumer discover better services.

We also look toward serving a greater number of merchants by ensuring consistent delivery experiences. Our on-demand delivery network is not only about the delivery of food, Meituan Instashopping covers a wide variety of categories including medicines, flowers, groceries, gifts and so on.

Through new initiatives we brought more convenience and more value-for-money products to consumers in lower tier markets. We have to improve the logistical and delivery network of rural areas and streamline the distribution of products from this market.

For -- most importantly, we have not only continued to improve incentives of our delivery riders, but also actively taken their feedback into consideration to better organize our delivery services. We also took steps to care for their personal and family well-being, as well as their long-term career path.

During the recent unprecedented flood in Henan, our delivery riders stood-up against this natural disaster and help the consumers in their most urgent hours. In addition, our retail division opened up a warehouse inventories in Zhengzhou, donating food and daily necessities to people in need.

And our hotel booking division acted quickly and arranged relevant hotels to provide emergency shelter for the public as well. Our Meituan Charity Foundation donated RMB100 million to provide shelter and post-disaster healthcare services for the cause.

We elect to continue to do the best we can and contribute back to our society. Lastly, a series of our regulatory policies and guidelines recently announced provided us the clear directions on how to improve our business operations.

We will abide by these guidelines strictly and carry out our social responsibilities proactively. The new regulatory environment change will allow us to better remind ourselves of our societal role and stimulate ourselves to innovate and better contribute to our society at the large, using our technology to empower and digitize offline businesses.

We hope to further contribute to the quality development of national economies, while improving lives of a broader population. We will live up to the higher expectations for our government, society, merchants, delivery riders, consumers and more.

We will continue to roll out our plans for sustainable development, bringing more employment opportunities to more markets, boost the consumption growth in less developed areas and carry out our carbon neutrality objectives in our daily operations. We will always have our social responsibilities at heart and do the best that we can to contribute to the growth and common prosperity of a broader society, always pursuing our mission to help people eat better and live better.

With that, I will turn the call over to Shaohui for an update on our latest financial results. Please go ahead.

Thank you, Xing. Hello, everyone.

I will now go through our second quarter financial results. In the second quarter, our total revenue reached RMB43.8 billion, increasing by 77% year-over-year.

On a year-over-year basis, our business segments achieved healthy growth as we recover from the COVID-19 pandemic. As a percentage of total revenue, cost of revenue was 71.4% this quarter, increasing from 65.3% in the prior year and decreasing from 80.5% in the prior quarter.

The year-over-year increase was mainly attributable to the increase in food delivery related costs, in line with the increase in order volume and the continued development exploration in our retail business, while the sequential decline was as a result of seasonality and improved fulfillment efficiency of our new initiatives. Meanwhile, we also allocated more resources, producer incentives, employee benefit, as well as promotion and advertising.

Selling and marketing expenses as a percentage of total revenue was 24.8% this quarter, increasing from 16.9% in the prior year and the 19.5% in the prior quarter. R&D expenses as a percentage of the revenue decreased to 8.9% from 9.6% in the prior year and the 9.4% in the prior year quarter, mainly due to our improved operating leverage.

G&A expenses as a percentage of total revenue was stable both on a quarter-over-quarter and year-over-year basis at 4.7% each quarter. Both our food delivery and in-store hotel & travel segment maintained their steady growth in this quarter, as a result the aggregate operating profit of both segments were RMB6.1 billion in this quarter, increasing from RMB3.1 billion in the prior year and RMB3.9 billion in the prior quarter.

Nevertheless, we recorded total operating loss of RMB3.2 billion in this quarter, primarily due to the rapid expansion of our new businesses, especially our retail businesses. On a consolidated basis, our adjusted EBITDA and adjusted net profit declined to negative RMB1.3 billion and the negative RMB2.2 billion, respectively, in this quarter.

Now moving on to our segment reporting, starting with food delivery, our strength in consumer base, merchant base and delivery network remain strong in this second quarter, continued to reinforce each other and enabling us to achieve solid growth. Both quarterly transaction users and quarterly purchase frequency achieved healthy year-over-year growth in this quarter, stimulate by our enhanced marketing efficiency, effective membership program and optimize operations of different consumption scenarios.

Meanwhile, we continue to onboard more high quality merchants, as well as more immediate sized merchants, which helped us to further diversify our platform selection and now better satisfy consumers’ ever-growing demand. In line with these growth drivers, our food delivery business order volume maintained strong growth momentum with the daily average number of food growth transactions growing by 59% year-over-year we achieved two-year CAGR above 30%.

By the end of June, the majority of merchants in all of the cities in China, where we have better operation ended up our new fee structure, it had a linked impacted on the blended monetization rate of food delivery. Monetization rate was stable on a year-over-year basis.

However, decrease by 1.0 percentage point on a sequential basis, mainly due to higher user incentives resulting from seasonality and marketing strategy. Hotel food delivery revenue was RMB23.1 billion in this quarter, representing a year-over-year increase of 59% and two-year CAGR of 34%.

Operating margin for food delivery is normally the highest during the second quarter of the year, as a sufficient delivery capacity and let delivery wider incentive due to the favorable weather conditions. As such, during the quarter, both operating profit and operating margin improved meaningfully on a sequential basis to RMB2.4 billion and 10.6%, respectively, partially offset by the higher user inventory ratio.

In addition, our business scale continued to grow and the daily average order volume surpassed 38.9 million orders in this quarter, further improving our order density. Economics of scale and improved capacity mobilization also contribute to a higher operating margin of our food delivery segment on a year-over-year basis.

Now, turning to our second segment. In Q2, our in-store, hotel & travel business continues to achieve outstanding growth, with segment’s quarterly revenue growing by 89.3% year-over-year.

Notably, our in-store business transaction volume, GTV and revenue all reached historic high, achieving two year CAGR of 38%, 40% and 33%, respectively. Our already focus on spending our service variety, diversifying our merchant supply and launching various theme-based promotion campaign has enabled us to capture consumer’s exclusive demand for local services.

Meanwhile, to meet the marketing needs for merchants in different industry, we have continued to diversify our transaction-based product. It helped nothing to promote higher transaction frequency and a better user acquisition on our platform in this quarter.

As a result, our in-store segment’s two-year CAGRs of commission revenue reached 37% in this quarter. Meanwhile, local services merchants also display higher market demand as their business was recovered.

To encouraging more small and medium restaurant merchants to try and use our advertising product, we are continuing to low the price for subscription-based product, driving the production rate of our subscription based services even higher in this quarter. In the meantime, more merchants also adopted our CPC advertising product this quarter, increasing the two-year CAGR of our CPC advertising revenue to more than 25%.

With respect to our hotel business, although, the broader industry has not yet fully recovered due to the occurrences of the pandemic, our domestic room night increased by 81% year-over-year in this quarter. This was largely due to our structural advantages and the strategic focus in the domestic market and inter-city travel scenario, as well as our strong performance during the Labor Day holiday season.

Meanwhile, the contribution from high-star hotels also further increased on a year-over-year basis as we continued to strengthen our collaborations with hotels in this segment, enhance our customer service quality, improve our pricing strategy and set up our platform incentives. Operating profit and operating margin for our in-store hotel & travel business increased to RMB3.7 billion and 42.6%, respectively.

This sequential improvement was mainly attributable to the increase on business scale, driven by seasonality and saw certain holiday promotional campaign, partially offset by increase in user incentives for our hotel business. With a strong recovery from COVID-19 and improved operating leverage, we expect net operating profit and operating margin both improved on a year-over-year basis.

Let’s now turn to our third segment, new initiative and others, during the period revenue in this segment increased by 113.6% to RMB12 billion, driven by both the recovery from COVID-19 pandemic and the continuous development of our new initiatives to satisfy consumers’ growing needs. The increase in revenue mainly came from retail business, B2B food distribution services and the bike-sharing and moped delivery services.

Operating loss for this segment expanded to negative RMB9.2 billion in this second quarter from negative RMB8 billion in the last quarter, while operating margin improved by 4.8 percentage points quarter-over-quarter to negative 36.8%. Our retail business especially our community e-commerce business continued to be our largest area of investment in this quarter.

As a result, operating loss for our community e-commerce business further widened on a sequential basis as we continue to expand its business scale. Additionally, while we continue to concentrate consumer habit and expand our good leader base to incentives, we also continue to make ensure investment in further enhancing our supply chain and fulfillment in area such as whole chain facilities, supply chain digitization and more.

The combination of our increasing business skill and investment led to a noticeable increase in our community e-commerce business losses during this quarter. Although, we are pleased to see that we achieve gradual improvement in the overall unit economics our community e-commerce business during the quarter.

We are also delighted to see the operating of both Meituan Instashopping and Meituan Grocery improved on a sequential basis driven by operating efficiency improvement. Now turning to our cash position.

As of June 30, 2020, our cash, cash equivalents and short-term investments totaled RMB122.5 billion. Additionally, during the quarter, our operating cash flow reduced to RMB2.9 billion from RMB5.6 billion for the same period of 2020, which was primarily attributable to our increased losses before income tax.

To conclude my prepared remarks, I would like to highlight several things. First, despite a recent direct to delivery changes, we believe that the industry outlook of our core business remains intact for the long-term.

Second, we have already witnessed positive progress plus our new initiative today, especially for our retail business. As we explore various new initiatives, we will maintain a committed and flexible investment pace, closely monitor the key metrics of each business line and continuously assess our progress.

Lastly, while continuing to contribute in the real economic growth with technology innovation, we will continue to attend to the common interest long-term growth of merchants and other parties on our platform. It’s our primary goal we will continue to optimize our operating efficiency by focusing on long-term return and creating great value to the society.

With that, we are now open for Q&A.

Thank you. Thank you, Xing, Shaohui, Scarlett and team.

I would like to ask on regulations that how do management think of the current business dynamics in this regulatory environment. Are there any adjustments to your current business operations or even profit outlook for each of the segments in food delivery, in-store, community e-commerce?

And how will you strike the balance between social responsibility and business efficiency? Thank you.

Okay. Thank you, Ronald.

So, I would like to share some macro thinking, because recently, there has been a lot of changes and so people are concerned, but everything happens for a reason. So, I would like to say, all for comment prosperity.

Even I would like to say, common prosperity is built in the gene of Meituan. Actually, it’s even in the name of Meituan, because the name Meituan came from two Chinese characters.

When I need to explain the name Meituan to people who don’t speak Mandarin, as I say, Mei, that was the character means good or better and the second character tuan means together. So Meituan means better together.

So, the common prosperity has always been built into our gene. With that, let’s turn to our businesses.

So recently, we have seen regulators do a series of regulations on the Internet, focusing on matters ranging from antitrust data security, community e-commerce and so on. And the government supervision and the public concern and the voices of our partners, including merchants and delivery riders, are both warning and motivating for us as they present higher expectations for us from the directions.

We believe that these regulatory change are good for the sustainable development and orderly growth of the Internet platform economy. It promotes a fair competition, as well as the industry development.

This is not just in China and we see similar regulation change globally as well. We will continue to actively implement compliance requirements that improve internal control mechanism across all our businesses, conduct in-depth review and actively rectify any issues to ensure food business compliance and to avert risk.

We have always maintained strict standards for data security and privacy protection. We will continue to strictly protect the user data in future.

In terms of our delivery services, we have prohibited any use of inclusive partnership and we will be firmly against it. We will fully respect the merchants’ choices and closed to attend to the worker situation welfare of delivery riders.

For the retail business, we have actively adjusted our pricing strategy and we will grow our business with the long-term development. Although, fine-tuning our business will inevitably bring some sequential subsequent impacts in the short-term, we believe that these adjustment are best options and will benefit us in the longer run.

Meituan is never meant to be a traditional Internet company. We are a platform that emopowers offline services potentially.

Compared to some peers, we are not a company that focuses on margins. The fulfillment cost and expenses to support our delivery network retail services are actually quite substantial and we have made a considerable investment in the ecosystem.

Actually, short-term profits have never been Meituan philosophy. We focus more on generating long-term value, creating social output and striving to always fulfill mission to help the people eat better, live better.

Therefore, comprised social responsibility and fitness development are all better [Technical Difficulty] And our goal to run our business with a currently long-term development remains unchanged. Although, we had some imperfections during our [Technical Difficulty] growth, we will work hard to rectify any issues we may have, always strive to improve ourselves.

Our purpose remained unchanged and we are confident that we can create a greater social value, while achieving greater business. Through technology innovation, we will continue to generate adequate and quality employment opportunities and bring convenience to consumers’ life.

We will help accelerate the industry disposition and help small or medium size merchants operate more efficiently and relatively create a more active, open and diversified market, while also continue to bring more efficient logistic network, which will supply to rural areas, helping farmers to increase their income and contribution to rural revitalization. Furthermore, we will continue to put carbon neutrality through bike and moped sharing businesses to the future sustainable development.

We will leverage our advantages and current capacity and help people grow all works of life, enjoy the benefit of digital economy, yeah, as the mission -- our mission remained unchanged to help people eat better, live better. Thank you.

Thank you, Xing.

Okay. Thank you.

Thank you, management. My question is also about the regulations and how do you view the recent regulatory guidelines on protecting workers on the new forms of employment as a [Foreign Language] and as well as guidelines on protecting delivery riders taking shifts for delivery companies.

In Chinese also [Foreign Language] and how will you adjust the delivery rider amendment and welfare? Thank you.

Thank you, Jiang. While the product guidelines were published, our management team conducted an in-depth study of the documents.

We believe that the guidelines have taken into consideration, holistically, new of labor relations such as delivery riders. It clarifies the rise of application of all parties, introduced this a series of practical and new measures.

So these are important to promoting a sustainable and healthy development of the on-demand delivery industry. We have such a special working group to go through the guidelines, self-examining and self-improve based on our current practice.

At present we have resolved some of the problems and improved some of our practices. The others are also in work and well, working progress.

We will strictly follow the guidelines on the other case and actively fulfill our responsibilities and make a greater effort to protect the lives of delivery riders from labor relations. At present, we have taken the lead in responding to the government’s call to prevent and solve occupational derisk.

Adjust riders worries by actively participating in the pilot program for implementing delivery riders occupational injury insurance. Going forward, we will operate with the authorities to provide a more comprehensive welfare scheme to the delivery rider group and promote at a high quality and help the industry development.

In terms of improving delivery multi-experiences, we will continue to upgrade our intelligent of present system with authority guidelines. We will improve the flexibility of delivery time by adopting different operational strategies and take into consideration of an unfavorable or uncontrollable factors to provide the riders reasonable rest during long working hours will adjust our ordering system introduce compulsory breaks for delivery riders.

We will continue to provide better equipment and services such as a smart helmet and battery change services to delivery riders’ personal safety and improve their work convenience. We are paying very close attentions to delivery riders’ feedbacks and continue to improve delivery riders working environments.

We will also continue to broaden the channel for their feedback by holding more panel sessions of our product experience workshop and field research and more. And in order to help delivery riders with their long-term career development, we initiated Delivery Station Manager that’s [Foreign Language] in Chinese.

By opening up promotional channel for high potential deliveries, this program equips them to be a special managers, all delivery product managers and so on. Meanwhile, we cooperate with the vocational and national open institutions and to help delivery riders upgrade their occupational skills and academic degrees, improve their careers with switch mechanisms and achieve for more diversified career development goals.

The product based guidelines issued by authorities this time have provided Meituan with a more specific direction on career policy part, which is a complement and also motivation for distance delivery industry, a new form of improvement. We will definitely work hard to improve ourselves certain example in the on-demand delivery industry with our own actions and promoted a healthy and sustainable development the company, the on-demand delivery industry and the food delivery industry?

Thank you.

Thank you.

Good evening. About regulation just wondering if you could share some color with us on the long-term unit economics of the food delivery business, different various recollection changes?

And then separately, I think, Xing you mentioned about technology early on to improve the efficiency. So, could you give us some color on the progress and any potential benefits that we can see in the coming years?

And perhaps, just final, any color on the potential impact from data related regulation on our marketing solution and marketing revenue? Thank you.

Thank you, Eddie. Yeah.

I will take the first question on the UE packet and technology progress. Despite the increase up right across in future with the better welfare for delivery riders we believe that improved the welfare will help us improve delivery rider retention rate on our platform and not for more the healthy development of the industry in the long run.

Therefore, we remain confident on the UE packet of the delivery and we believe we are further into our delivery efficiency across the different ways. For example, we were more widely adopted new deliver model such as the intelligent lockers, which proved to have short-term deliver time in the operating area as a well ensuring the good experience of both the delivery riders and consumers.

In the meanwhile autonomous delivery has been our key R&D focus to improve delivery efficiency. We have actively invented and designed of autonomous delivery vehicles and delivery drones over the past few years, as we believe that once widely applied, it could make significant positive impact on our businesses.

We aim to construct a comprehensive on-demand delivery network with autonomous delivery by countrymen while our delivery riders and expect to improve our efficiency in future. As of now, our autonomous delivery has been deployed in Beijing for over a year, accumulating nearly 50,000 delivery orders to-date.

In April this year, we launched the latest addition of our sales developed autonomous delivery vehicle is respect to deploy more widely over the next few years. In July, we efficiently launched autonomous delivery droned we have tested and developed our drone services for over three years now and have hire drones for actual orders end of this year.

As a result, we had accumulated over 2,500 delivery orders and 220,000 test flights using drones. During the period of pandemic recurrence in Guangzhou, we used zone to establish an air channel for transporting urban materials in Shenzhen’s Nanshan district delivering mostly important with its suppliers to residents in this area.

We also used our autonomous delivery vehicles to deliver essential supplies to Hantang [ph] Depot during the COVID recurrence in [inaudible]. We have also make investment to support the drone delivery staff and we actively contribute to the development of the field through in-house RMB and of our investment.

Overall, we believe that we have master approach to further improve delivery efficiency by increased order density of future and we are confident that we can undertake more social responsibility by achieving our long-term profit -- target profit driven business.

And Shaohui, any impact on marketing solution given data related regulation?

Yeah. Sure.

Yeah. I think, first, we have carefully monitored the new policy related to that.

We think this in line with the company’s philosophy and policy, but we should always implemention and protect our users privacy and order data accumulate to our platform. So I think we are -- we completely understand their the rationale behind their new policy and we are strictly follow what the -- which is later is required.

Overall, we think this is the right move for the overall industry and potentially we are -- we will have positive impact on the industry in the long-term. It’s also I think better for fair competition in the industry from hard competition.

We will continue to access the impacts on us and that we are follow what the regulators required. Thank you.

Thank you.

Thank you management for taking my question and congratulations on strong quarter. I have a couple of questions ride sharing or share mobility business.

We noticed that Meituan has recently increased its investment in self-operated ride sharing business. How do you see the opportunities in this industry going forward?

Is there any business strategy updates you can share with us and how much should we expect you to further invest into this business in the near future? On the longer term view, what is your expectation on profitability for the ride sharing business?

And lastly, any comment on recent regulator supply demand on commission rate cap? Thank you very much.

Okay. Thank you, Alex.

So, ride sharing is, as we know high potency and mass market category. And it has been one of our dangerous experiments in ride sharing categories.

We believe it has the potential. We started our ride sharing business, well, four years -- more than four years ago through the self-operating model.

And then we further extended our geographic coverage through aggregate payment model, because aggregating model is an item. And our aggregated model significantly expanded rider supply during the positive quarters.

While self-operated models brings better user experience by providing stable and better control to rider supply especially during the peak hours. Last year we only run self-operated model in two cities that is Shanghai and Beijing [ph].

And however, we now believe that both our capability and market environment and have reached the point that we can expand our curated model in some more cities where we already have operations to aggregate the model. And so since July we further developed our self-operated model in more than 30 cities.

On the operational side, we assume those cities that are strategically important to run self-operated model. While we continue to incur drivers to cooperate with us to expand our capacity and it has right quality.

We will also design our marketing operations to boost our business growth. In the short-term, marketing expenses were increased our expense a bit scale.

We will maintain financial discipline to achieve a sustainable growth. And the Ministry of Transportation recently commented that ride sharing companies need to restrict their commission rate owned drivers.

Once there is a further timeline on that we adhere strictly. Currently our commission rate complies with industry standard and vary from region to region and time to time and we are still at a market state for ride sharing business and we will show our cost to returnable levels.

We do not expect to have a significant impact to our operation. After analyzing other ride sharing business both in China and also in other countries, we still believe that our ride sharing business has potential to scale up and have original long-term in the prospect to the continues improvement of its operating efficiency.

We collaborate our user base to develop our ride sharing business and can also cross-sell other data services to our ride sharing users. And also we believe that in long run like by nation of ride sharing and autonomous driving can create a more social economic value for society and we are not focused on short-term performance rather than the long-term value that the ride sharing create for the broader community.

That’s all. Thank you.

Hi. Good evening.

Thanks management for taking my questions. After completing the rationale coverage we still made plenty of the growth both on in recent months I think it’s partially due to more rationale for the pricing and also because the company increased its investment in the co-chain capabilities during the summer, as we seen anything change from our previous expectation after we started community e-commerce business for a year now and is there any adjustment to our thinking on the addressable market and do we expect to significantly lower our growth target and investment advance of that and what’s the key business strategy for community e-commerce our business going forward?

Thank you.

Thank you, Thomas. The recent directive recognize this industry players create direction and the industry puts a more focus on improved long-term capabilities such as product assorting, SKU management, supply chain and logistic network and promote a healthy industry growth.

For us it will mean that we have actively addressed the regulatory guidance, we are expecting our strategy. We will strength our competence by focusing our efficient improvement and better consumer service by delivering more superior user experience, we can reinforce our consumer management and planned our price.

As we optimize the SKU selection and control product quality and ensure timely delivery. And we are still very competent about the upside in penetration rate and prospects of community ecommerce in the long run.

We believe that the change will drive the industry towards a healthier and more sustainable growth. It is a great opportunity for us to tap into the physical e-commerce, the broader consumer retail market.

To operating this business over the past year, we are more convinced of how this business can help residents in lower tier markets and we truly recognize the capacity of its -- of this business operation. In order to ensure high quality customer experience of community commerce, we need to build up multi dimensional capabilities and stay patient and invest decisively and learn rapidly and continue to iterate.

During the past quarter, we expanded and select geographically and deepened the penetration into lower tier markets. Meanwhile, we have up build up our coaching capability nationwide.

By using different procurement strategy for fresh produce and frozen products our co-chain logistics able to achieve better product quality and user experience during the summer. In the traditional off season of retail market in the second quarter, we were able to further improve our supply chain capabilities and logistic network.

We will continuously improving operation capability and iterate the business model and assess our progress on a continuous basis based on our annual long-term oriented strategy despite the short-term volatility. And overall there are some fluctuations of format as lack due to the recent regulation guidelines and seasonality that will be made positive on the healthy growth of the other business, so that we may take longer to achieve our long-term before the business has not changed.

We will follow regulation and instructions to optimize our pricing strategy and build up our long-term capabilities. We will gradually improve Meituan’s competitiveness and operational efficiency in long run.

So, in short, we believe that TAM is huge but currently it will take a time. Thank you.

Thank you.

Hi. Good evening, management.

Thank you for taking my question. The in-store, hotel & travel segment continue to achieve a high growth this quarter.

So what is the expectation for this segment in a longer term sustainable growth rate, as well as the profitability? And for Q3, how should we think about the impact from the recurrence of the COVID-19 cases in China?

Thank you.

Thank you, Kenneth. Thank you for raising the question about in-store segment.

We were pleased to see that the GTV around hotel segment achieved a three-digit year-over-year growth rate in 2Q represent a two-year CAGR in the high-30s. GTV growth acceleration led to increases in transaction-based revenue, while advertising revenue also achieved a commendable growth.

Thanks to merchant business coverage. We can really pick this after the recovery rents occurred in a quite few time in cities and therefore renewed controls over a certain area.

We noticed that the restaurant daily revenue dropped meaningfully month-by-month in August and the hotel occupancy rate also decreased to levels below the essential rate in 2019. As a result, we estimate reasonable net impact to our hotel segment in August.

But -- we -- the measures for pandemic prevention and control by local government have been effective and also become more routine. Therefore, we believe that impact on our business may not last for too long in our in-store hotel segment will continue to have resilient growth in 2021.

We remain highly confident in these segment long-term potential. There are 14 million local merchants in China.

They only penetrate 2.4 million non-hotel paid merchants, which imply ample room for future growth. In future, our business development team will continue to expand our online merchant base.

We will also leverage our user insights, long tail current consumption trend to bring more service capabilities online. To attract more young consumers, we will explore more in directed media type, provide namely high quality supplier as far as tested in actual recommendation.

As a result, we will be able to provide more services in that that means consumers preference and diversified means, while also improving user engagement and preferences. For our merchants, we will see a wider room of transaction-based product and self-service tools to have been accurately grow and optimize the online operations.

We believe that more merchants will choose our diversified advertising product in the future, driving up growth, we will also plan on using more self-owned business development team versus third-party agent, which will help improve our penetration rate in lower tier market. For our hotel & travel segment, we have long established advantage in low-star hotels and packet for high-start hotel gives us and improve our segment market share and ADR.

With all those above measures and education on steadily growing domestic consumption, we believe that this segment has the potential to maintain a revenue growth of over 25% over the next five years with healthy margins. Thank you.

Thank you very much.

Hi. Thank your management team for the opportunity to ask questions.

Most of my question has been already addressed. But I have one last one on the retail business, looks like we have increased our investment in Meituan Instashopping, and also Meituan Grocery in the past couple of quarters.

Is there any recent update on the strategies and also priorities? And how do you assess the kind of long-term profitability of these two businesses, as well as follow to Meituan?

Thank you.

Yeah. Sure.

So we are telling the [Technical Difficulty] focal, including Meituan Select, Meituan Instashopping and also Meituan Grocery. For Meituan Select is now raise more for free order in a group purchase model, while Meituan Instashopping and Meituan Grocery provide 30 minute delivery services to consumer.

Our platform continue to convert high quality for delivery users to use Meituan Instashopping which shows its high growth in Q2 by further increasing SKUs and optimizing product structure, we maintain roughly the year-over-year growth in other volume. Through holidays such as May 20 and our 24 and some medicine delivery, we further cultivate consumer market share is the go-to platform for on-demand delivery service that brings everything to their doorstep.

Flower and the medicine achieved very high growth with GTV for flower growing by 250% year-over-year and medicine growth by 345% year-over-year in Q2. Over the next few quarters, we will continue to invest and minimize disruption by expanding our product categories in an SKU.

We will further strengthen our corporation with top brands, local supermarkets, convenience stores, flower shop, pharmacies and more local merchants and continue to cultivate consumer market share. About shopping Meituan Instashopping is the way for us to extend our on demand delivery consumption in areas from restaurant food to more directed category.

It not only includes the transaction frequency and up of existing medium to high frequency with delivery users on our platform are also include a efficiency of our delivery network, we believe that every order volume of Meituan Instashopping has potential to achieve of about RMB10 million in the long run while economies of scale will head us to long-term profitability. Our delivery capacity between Meituan Instashopping and food delivery complement each other and it’s a clear advantage for us to further increase order density and drive our on demand delivery network efficiency.

We will continue to convert frequency of delivery users to using Meituan Instashopping. For Meituan Grocery, it’s our first operating sun distribution warehouse model, which essentially complete our current extension in the four Tier 1 cities in the second quarter, but the volume grows through 350% year-over-year.

In terms of the business model, we believe that on our grocery market is large and diverse in our different models coexist and meet varying this different users at different markets. Compared to community e-commerce, the front distribution warehouse model focused on meeting their needs of users in higher tier cities.

Meituan Grocery can provide users with on-demand delivery by utilizing our advantage and delivery network while offering a wider range of attractive high quality products. Over the past quarter, we continue to accelerate our operational capability of Meituan Grocery, including first, adaptive warehouse capacity for a portion of our warehouse based on user needs and optimize the strategy and product selection, marketing, warehousing and delivery operation.

Second, for the accelerated supply chain capability to extend our SKU Offering. Third, strengthen our promotional capability to continue to capture user marketshare.

Fourth, continue to improve operations and delivery capability to while increase overall efficiency. Similar to other players in the market, our operating loss of distribution warehouse model is theoretically high, but we believe that we will further enhance the frequency optimized SKU offering and improve the delivery method of SP and ALV for Meituan Grocery will continue to increase and the overall profitability of the business will continue to improve with economy of scale.

Thank you.

Thank you.

Thank you.

Okay. Thank you everyone for joining our call.

We are looking forward to speaking with you next quarter. Thank you.

Thank you, everyone.