From May 29th to June 4th, international oil prices fell rapidly, with five consecutive bearish candlesticks and a cumulative drop of nearly 10%, reaching a low of $72.48, just one step away from the psychological level of $70. There are two main reasons for the decline in international oil prices. One is that OPEC's production cut was less than expected. After the 37th ministerial meeting of OPEC on Sunday last week, it was announced that the voluntary production cut measures (about 2 million barrels per day, originally scheduled to expire at the end of June) would be extended to the end of 2024; collective production reduction measures (about 39 million barrels per day) would be extended until 2025. Although production cuts have been extended, there is no new production reduction plan as expected by the market. Under the disappointment of the expectation, international oil prices were negatively affected. The other reason is that the interest rate cuts of Europe and America are coming, meaning that there is downward pressure on the economy. Yesterday, the Bank of Canada announced its rate decision, cutting interest rates by 25 basis points and lowering the benchmark interest rate to 4.75%. Canada's latest core CPI annual rate is 1.6%, already lower than the moderate inflation standard of 2%, and the potential risk of recession has increased. The European Central Bank's interest rate decision today also has the possibility of interest rate cuts. Market participants expect the Fed to cut interest rates for the first time before the end of the year. Once the inflation rate of European and American countries falls more than expected, the demand for crude oil will significantly decrease. Coupled with OPEC's insufficient production reduction plan, the decline in international oil prices is logical.

On Thursday, Meituan (03690) announced better-than-expected second-quarter earnings and a new $1 billion buyback plan, triggering a sharp increase of 12.5% to HKD 115.7, the largest gain among blue chips, with a trading volume of HKD 10 billion.

Meituan's second-quarter revenue this year was CNY 82.25 billion, a 21% increase year on year. Adjusted net profit was CNY 13.6 billion, a 78% increase, both surpassing market expectations. The overall operating profit margin was 13.7%, an increase of 6.8 percentage points year on year. The core local commerce segment's operating profit margin was 25.1%, an increase of 3.3 percentage points. The new business also narrowed its losses, with a segment operating loss rate of 6.1%, a decrease of 24.9 percentage points year on year.

In terms of its main business performance, the core local commerce segment recorded revenue of CNY 60.68 billion, an increase of 18.5%, and an operating profit of CNY 15.23 billion, a growth of 36.7%. This is mainly due to a decrease in the proportion of delivery-related costs for dining takeout and Meituan Flash Purchase, as well as a decrease in the proportion of user incentives in revenue.

Meituan's in-store travel business saw a year-on-year increase of over 60% in second-quarter order volume. The number of annual active users and annual active merchants both reached record highs. Meituan stated that despite changes in consumer preferences in the current macro environment, the demand for local services remains strong. Its new brand, "Meituan Group Buy," continues to meet consumers' demand for high-value products through a shelf model.

Meituan's new business revenue in the second quarter was CNY 21.569 billion, a year-on-year increase of 28.7%. The segment operating loss was CNY 1.314 billion, a decrease of 74.7% year on year. Meituan stated that in the previous quarter, it improved the operating efficiency of Meituan Optimal by enhancing product quality and strengthening supplier cooperation. This resulted in an increase in average order value and commodity markup rate, leading to a significant narrowing of losses on a quarterly and yearly basis. Meituan also revealed that other new businesses, including B2B catering supply chain services, catering management systems, bike sharing, and power bank sharing, achieved healthy growth and efficiency improvement.

Meituan's latest quarter gross margin reached a 15-quarter high. The decrease in costs and the narrowing of losses in new businesses contributed to the surprise in performance. The large-scale buyback also demonstrated sincerity and market confidence. Several institutions have raised their target prices for Meituan after the release of the results, and they expect the growth trend of Meituan's takeaway business to continue. The growth of operating profit should exceed sales growth, indicating the possibility of sustainable growth.

After the release of its performance, Meituan has risen for two consecutive days. Breaking through the key level of HKD 122 will be crucial. Since late June, the stock price has tested this level several times but has not been able to surpass it. Looking back at the performance since May, it has tended to fluctuate within a range. If HKD 122 is not broken, there may be another range pattern like the one from late June to July. However, if a breakthrough occurs, the resistance will be towards the high of HKD 129 in May.