$Meituan(03690)$ is growing into a one-stop local service provider, partner and platform ecosystem for consumers, merchants, and suppliers. Meituan’s 1Q21 results came in above expectations, with robust results across all 3 business segments. Non-IFRS net loss of RMB3.9b came in slightly better than consensus expectation of a loss of RMB4.0b. On the ongoing investigation by the SAMR, Meituan notes that exclusive partnerships have been prohibited, but there has not been any significant impact on its day-to-day operations. On rider benefits, Meituan plans to cover additional injury-related insurance for its 1P riders, which we believe adds up to ~RMB0.05 of extra rider costs per delivery, likely to be less than what the market had feared in our view. On its CGP business, we note that Meituan Select has expanded its coverage to more than 2,600 cities and counties in 1Q, which broadly completes its nationwide expansion objective. We note that more than half of the new user growth in 1Q was contributed by Meituan Select; management believes that the latter can potentially add 300-400m users over the next few years. Encouragingly, we note that Meituan Select has already exhibited better user retention and transaction frequency metrics compared to its food delivery business. All considered, we believe this set of results and management’s follow-up actions on a number of regulatory issues should help allay a number of fears by the market. Incorporating other changes to our forecasts, our FV rises from HKD328 to HKD355. (By OCBC Investment Research)