Broker: DBS
Date of Report: 01 Dec 2025
Excerpt from DBS report.
Report Summary
- Meituan reported a larger-than-expected adjusted net loss of RMB16.0bn in 3Q25, mainly due to intensified subsidy competition and a surge in low-value orders.
- Revenue growth slowed, with core local commerce revenue declining 3% year-on-year, while New Initiatives revenue grew 16%.
- Operating profit for core local commerce turned negative, reflecting heavy subsidies, but losses in New Initiatives narrowed thanks to efficiency gains.
- The company maintains leadership in high-value order segments and continues to gain traction overseas, with its Hong Kong business turning profitable and new market entries in the Middle East and Brazil.
- Despite near-term profitability pressure and a longer path to earnings recovery, DBS maintains a BUY rating, citing Meituan’s strong market position and expansion potential, though the target price is trimmed to HKD130.
- Future earnings forecasts were cut, reflecting a more gradual rollback of subsidies and ongoing competition from Alibaba, but long-term prospects remain positive with anticipated improvement in margins as the market rationalizes.
above is an excerpt from a report by DBS. Clients of DBS can be the first to access the full report from the DBS website : https://www.dbs.com
