Meituan: Expansion Into Saudi Arabia Unlikely to Bear Fruit, Signals Intensifying Domestic Pressures

After seeing news reports of Meituan launching its overseas food delivery operations, KeeTa, into Riyadh, Saudi Arabia, as its first international foray outside of Hong Kong, we do not believe that Meituan's expansion will be materially incremental to our current valuation given the long-term uncertainty, its market positioning in Saudi Arabia, and the near-term losses it will likely incur. We believe Meituan will not enjoy the advantage it has in China, which has helped it to grow its platform to 700 million users currently, given different market conditions in Saudi Arabia than China. We keep our fair value estimate unchanged at HKD 102.