Company Reports

We expect Meituan’s losses to narrow in 2026, driven by a more rational competitive environment as Alibaba and JD.com gradually scale back on-demand delivery subsidies following the price war that began in 2025. We estimate Meituan’s food delivery gross transaction volume share exceeded 50% as of the first quarter of 2026. We expect Meituan to remain the largest food delivery platform in China in the foreseeable future.

Meituan swung to a second-quarter operating profit of CNY 2.7 billion, well ahead of the CNY 1.3 billion loss S&P consensus expected and a sharp turnaround from the CNY 6.5 billion loss in the first quarter. This was mainly driven by the improvement in core local commerce.

We expect Meituan’s losses to narrow in 2026, driven by a more rational competitive environment as Alibaba and JD.com gradually scale back on-demand delivery subsidies following the price war that began in 2025. We estimate Meituan’s food delivery gross transaction volume share exceeded 50% as of the first quarter of 2026. We expect Meituan to remain the largest food delivery platform in China in the foreseeable future.

Meituan’s core local commerce operating loss narrowed to CNY 2.0 billion from CNY 10.0 billion quarter on quarter. Management expects a further sequential improvement in unit economics in the second quarter, supported by favorable seasonality and more rational competition.

We expect Meituan’s losses to narrow in 2026, driven by a more rational competitive environment as Alibaba and JD.com gradually scale back on-demand delivery subsidies following the price war that began in 2025. We estimate Meituan’s food delivery gross transaction volume share exceeded 50% as of the first quarter of 2026. We expect Meituan to remain the largest food delivery platform in China in the foreseeable future.

We updated our Meituan view after Alibaba registered CNY 17.3 billion free cash outflow and a $4.5 billion sequential reduction in net cash in the March quarter mainly due to AI investments. The firm also announced its target to achieve positive quick commerce, or QC, unit economics by March 2027.

Meituan's EBIT fell by CNY 9 billion year on year to a CNY 16 billion loss in the fourth quarter of 2025 due to competition in food delivery and in-store services, as well as overseas expansion.

We expect slow growth in Meituan’s customer acquisition, as the platform already boasts over 770 million users—68% of the Chinese internet users as of June 2024. While Meituan continues to deepen user penetration in less developed areas in China, it is also focusing on increasing customer purchase frequency and expanding overseas. In recent quarters, Meituan has replaced its former agency model with direct operations nationwide, aiming to enhance services for merchants in lower-tier markets. In addition, Meituan rolled out the Shen Hui Yuan membership program, offering coupons across food delivery, in-store services, hotels, and travel services, to encourage cross-selling and stimulate new demand. To address the downtrading trend amid China’s weaker economy, Meituan has also launched Special Deals, Group Buy, and Pin Hao Fan (low-cost meals).

Meituan agreed to acquire 100% of Dingdong Fresh, an on-demand fresh grocery e-commerce business in China, for USD 717 million, provided that Dingdong Fresh maintains minimal net cash of USD 150 million. Closure of the deal is pending regulatory and shareholder approvals.

We expect slow growth in Meituan’s customer acquisition, as the platform already boasts over 770 million users—68% of the Chinese internet users as of June 2024. While Meituan continues to deepen user penetration in less developed areas in China, it is also focusing on increasing customer purchase frequency and expanding overseas. In recent quarters, Meituan has replaced its former agency model with direct operations nationwide, aiming to enhance services for merchants in lower-tier markets. In addition, Meituan rolled out the Shen Hui Yuan membership program, offering coupons across food delivery, in-store services, hotels, and travel services, to encourage cross-selling and stimulate new demand. To address the downtrading trend amid China’s weaker economy, Meituan has also launched Special Deals, Group Buy, and Pin Hao Fan (low-cost meals).

Meituan's third-quarter core local commerce EBIT plunged by CNY 29 billion year on year to a CNY 14 billion loss due to intense food-delivery competition, while new initiatives' EBIT loss widened by CNY 251 million due to expansion into food-delivery markets in Qatar, Kuwait, and the UAE.

We expect slow growth in Meituan’s customer acquisition, as the platform already boasts over 770 million users—68% of the Chinese internet users as of June 2024. While Meituan continues to deepen user penetration in less developed areas in China, it is also focusing on increasing customer purchase frequency and expanding overseas. In recent quarters, Meituan has replaced its former agency model with direct operations nationwide, aiming to enhance services for merchants in lower-tier markets. In addition, Meituan rolled out the Shen Hui Yuan membership program, offering coupons across food delivery, in-store services, hotels, and travel services, to encourage cross-selling and stimulate new demand. To address the downtrading trend amid China’s weaker economy, Meituan has also launched Special Deals, Group Buy, and Pin Hao Fan (low-cost meals).

Meituan's second-quarter EBIT fell 98% year on year, and core local commerce, or CLC, EBIT dived 76% or CNY 11.5 billion due to intense food-delivery competition. It expects a significant loss in CLC in the third quarter. In-store business order volume surged over 40%; annual users grew over 20%.

We expect slow growth in Meituan’s customer acquisition, as the platform already boasts over 770 million users—68% of the Chinese internet users as of June 2024. While Meituan continues to deepen user penetration in less developed areas in China, it is also focusing on increasing customer purchase frequency and expanding overseas. In recent quarters, Meituan has replaced its former agency model with direct operations nationwide, aiming to enhance services for merchants in lower-tier markets. In addition, Meituan rolled out the Shen Hui Yuan membership program, offering coupons across food delivery, in-store services, hotels, and travel services, to encourage cross-selling and stimulate new demand. To address the downtrading trend amid China’s weaker economy, Meituan has also launched Special Deals, Group Buy, and Pin Hao Fan (low-cost meals).

To defend its food delivery market share amid intense price competition, Meituan expects second-quarter year-on-year growth in core local commerce, or CLC, revenue, to decelerate from the first quarter, with second-quarter CLC operating profit declining significantly year on year.

We expect slow growth in Meituan’s customer acquisition, as the platform already boasts over 770 million users—68% of the Chinese internet users as of June 2024. While Meituan continues to deepen user penetration in less developed areas in China, it is also focusing on increasing customer purchase frequency and expanding overseas. In recent quarters, Meituan has replaced its former agency model with direct operations nationwide, aiming to enhance services for merchants in lower-tier markets. In addition, Meituan rolled out the Shen Hui Yuan membership program, offering coupons across food delivery, in-store services, hotels, and travel services, to encourage cross-selling and stimulate new demand. To address the downtrading trend amid China’s weaker economy, Meituan has also launched Special Deals, Group Buy, and Pin Hao Fan (low-cost meals).

Per Leifengwang, Meituan instashopping's computers, communications, and consumer electronics home appliance orders were half of JD.com's in 2024. Its alcohol, water, snacks, and dairy orders exceeded JD's. Taobao upgraded its on-demand delivery feature and launched a CNY 10 billion subsidy program.

We expect slow growth in Meituan’s customer acquisition, as the platform already boasts over 770 million users—68% of the Chinese internet users as of June 2024. While Meituan continues to deepen user penetration in less developed areas in China, it is also focusing on increasing customer purchase frequency and expanding overseas. In recent quarters, Meituan has replaced its former agency model with direct operations nationwide, aiming to enhance services for merchants in lower-tier markets. In addition, Meituan rolled out the Shen Hui Yuan membership program, offering coupons across food delivery, in-store services, hotels, and travel services, to encourage cross-selling and stimulate new demand. To address the downtrading trend amid China’s weaker economy, Meituan has also launched Special Deals, Group Buy, and Pin Hao Fan (low-cost meals).

In an unofficial audio clip, JD.com founder Richard Liu said JD will keep its food delivery net margin below 5% to allow restaurants and riders to earn more. The shares of Meituan, JD, and Dada Nexus were down 8%, 6%, and 1%, respectively, on April 16.

We have transferred the coverage of Meituan. In the fourth quarter, revenue grew 20% year on year while recurring EBIT soared over 5000%, as competition eased. Sequentially, the new initiatives segment’s operating loss doubled, with the loss margin widening to 9.5% from 4.2%.