Morgan Stanley has issued a research report maintaining its "Overweight" rating on MEITUAN-W (03690) with an unchanged target price of HK$120. The firm has kept its profit forecasts for the company and continues to assume that the per-order unit economic benefit for its food delivery business will reach RMB 1 starting from 2027. Under the base case scenario, the operating profit margin for its in-store, hotel, and travel business is projected to gradually recover from the current 25% to an estimated 30% by 2030. Morgan Stanley forecasts that MEITUAN's Core Local Commerce (CLC) segment will report an operating loss of RMB 4.3 billion for the first quarter, with breakeven expected in the second quarter. Following Alibaba's commitment to significantly narrow losses in its instant retail segment, the clarity of MEITUAN's roadmap towards profitability has notably improved. Regarding business segments, Morgan Stanley expects MEITUAN's in-store, hotel, and travel (IHT) business to achieve a 10% year-over-year increase in Gross Transaction Value (GTV) and a 9% rise in revenue for the first quarter. Operating profit for the segment is projected to remain roughly flat quarter-over-quarter at RMB 4.1 billion, with an operating profit margin of 25%. For new ventures, its overseas business, KeeTa, will focus on consolidating its existing markets this year. The unit economics in Saudi Arabia continue to improve, while the Hong Kong market remains profitable.