1、M IdeaAlibaba Group Holding|Asia PacificRevamping Amap Business This could be the first step of BABA re-launching in-store services.We see risk for on demand competition extending to in-store services,which could result in further margin pressure for Meituan.BABA PDD Meituan JD.Whats new:BABA today

2、announced the roll-out of AI-driven rankings for restaurants,hotels,and attractions on Amap,similar to Dianping from Meituan.The Street Stars feature will use AI to rank 1.6 million businesses across 300 cities.BABA also committed to invest Rmb1bn of incentives to drive more traffic to Amap and enco

3、urage more users to consume in-store services.Our view:Amap is the largest navigation map in China with close to 200mn DAU,according to Quest Mobile with the recent AI revamp.We believe this could be BABAs first move to re-launch in-store services and more offerings could come.BABA has been seeing a

4、ggressive expansion into the local services segment,starting from food delivery,moving to non-food/retail quick commerce,and now local services.So far,BABAs execution has been better than our expectations with MAC+25%YoY in Aug.Management also(1)committed to narrow UE losses by half in 1-2 months,(2

5、)expects QC to bring in 2-3%CMR growth,and(3)targets Rmb1tn incremental GMV from QC in 3 years.We maintain our estimate in investments in QC/in-store unchanged at Rmb35bn in F2Q and Rmb80bn in F26.With BABA now increasing its footprint into in-store business,we think the implications to Meituan are(

6、1)more near-term earnings pressure,(2)in-store has a lower entry barrier than on demand delivery(e.g.,Douyin case previously),and(3)we have lowered(previously)long-term profitability for in store to 2%from 2.5%with intensified competition.We now expect a CLC OP loss at Rmb10 bn in 3Q(on-demand Rmb15