Meituan Sees Loss Improvement on New Initiatives, but Long-Term Competition Remains a Concern
We see some near-term headwinds for no-moat Meituan as its food delivery business, which accounted for 52% of 2023 revenue but is expected to see operating margin pressure in 2024. The company cited impact from COVID-19 lockdown policies but also indicated there is some limited visibility due to the macroeconomic slowdown. We also expect customer acquisition to slow, given that there are about 700 million users on the platform and is approaching saturation in China.