Meituan (3690 HK) Summary
Core Content and Key Insights
Meituan, a leading Chinese online platform, reported its 4Q25 financial results on 26 March. The key highlights include:
- Revenue: RMB92.1bn, up 4.1% YoY and in line with Bloomberg consensus.
- Adjusted Net Loss: RMB15.1bn, at the lower end of the previously guided range of RMB15.1bn-16.1bn.
- Core Local Commerce (CLC) Performance: The CLC segment is showing signs of bottoming out, with a 29% QoQ reduction in operating loss to RMB10.0bn. The company expects a 58% QoQ reduction in 1Q26, bringing the operating loss to RMB4.2bn.
- CLC Recovery: Despite a 1.1% YoY decline in revenue, CLC showed recovery in order share and GMV share, driven by a stronger-than-peers increase in Average Order Value (AOV), supported by the holiday season and strong consumer mindshare.
- New Initiatives: Revenue from new initiatives reached RMB27.3bn in 4Q25, up 18.9% YoY, with expected further growth of 20% YoY in 1Q26. Segment operating loss is expected to narrow sequentially to RMB2.6bn.
Main Views and Analysis
- Regulatory Impact: Regulatory guidance in the food delivery industry is steering the sector toward healthier development, which has positively influenced Meituan's performance.
- In-Store Segment Focus: Players in the in-store segment are increasingly focusing on core competencies and categories, which is driving more efficient expansion.
- Competition Phase: The most intense phase of competition in the local services sector may have passed, with Meituan showing signs of stabilization.
- User Subsidies: The company continues to optimize user subsidies, which should help improve long-term unit economics (UE) and sustain its competitive advantage.
- Earnings Recovery: While a meaningful earnings recovery may still take time, the company is on a path to improvement.
Financial Forecasts and Valuation
Revenue Forecast (RMB bn)
| Year |
Forecast (2026E) |
Previous (2026E) |
Change (%) |
| 2026 |
408.6 |
421.5 |
-3.1% |
| 2027 |
464.8 |
482.5 |
-3.7% |
| 2028 |
517.4 |
517.4 |
-0.0% |
Operating Loss and Non-IFRS Net Loss (RMB bn)
| Year |
Forecast (2026E) |
Previous (2026E) |
Change (%) |
| 2026 |
-12.9 |
-18.9 |
31.7% |
| 2027 |
31.2 |
38.3 |
-18.4% |
| 2028 |
49.8 |
517.4 |
-51.1% |
Non-IFRS Net Profit Margin
| Year |
Forecast (2026E) |
Previous (2026E) |
Change (%) |
| 2026 |
-1.2% |
-2.3% |
1.2 pp |
| 2027 |
7.2% |
na |
- |
| 2028 |
9.4% |
na |
- |
Adjusted Net Profit (RMB mn)
| Year |
Forecast (2026E) |
Previous (2026E) |
Change (%) |
| 2026 |
-4,703.1 |
-9,603.0 |
51.1% |
| 2027 |
33,682.8 |
na |
- |
| 2028 |
48,726.3 |
na |
- |
P/E Ratio (x)
| Year |
Forecast (2026E) |
Previous (2026E) |
Change (%) |
| 2026 |
13.1 |
na |
- |
| 2027 |
17.1 |
na |
- |
| 2028 |
11.0 |
na |
- |
DCF-Based Target Price
- Target Price (TP): HK$141.1 (unchanged from previous TP of HK$141.0)
- Valuation: Based on a WACC of 11.0% and terminal growth of 2.5%, the TP translates into a 22.6x 2027E adjusted P/E.
Share Performance and Market Data
- Market Cap: HK$526,881.0 million
- Average 3 Months Turnover (HK$ million): 4,570.9
- 52-Week High/Low (HK$): 162.80 / 74.50
- Total Issued Shares (mn): 6,077.1
Shareholding Structure
| Shareholder |
Percentage |
| Crown Holdings Asia Limited |
8.1% |
| BlackRock |
5.3% |
Analyst Recommendation
- Rating: BUY (Maintain)
- Target Price: HK$141.10
- Current Price: HK$86.70
- Up/Downside: 62.7%
Conclusion
Meituan's financial performance in 4Q25 indicates a recovery in CLC and improvement in operating efficiency. While the most intense competition may have passed, earnings recovery is expected to take time due to ongoing macroeconomic challenges. The DCF-based valuation remains unchanged, suggesting continued positive outlook on the company's potential to optimize user subsidies and narrow losses in the coming quarters. The new initiatives are also expected to accelerate revenue growth and improve unit economics. Overall, the company is viewed as positive for long-term growth and value creation, with buy recommendation maintained.
