Meituan (3690 HK) (Buy) - Margin turnaround on rational competition

研报英文原文证据摘录

Meituan (3690 HK) (Buy) - Margin turnaround on rational competition

Global Markets Research

Meituan 3690.HK 3690 HK 2 June 2026

EQUITY: MEDIA & INTERNET

RatingMargin turnaround on rational competition Up from Neutral Buy

Target price

Increased fromUpgrade to Buy on improving profitability of food delivery HKD 109.00 HKD 92.00

Closing price HKD 85.50 2 June 2026Rational competition leads to significant margin turnaround; upgrading to Buy

Meituan’s 1Q26 financial results demonstrate robust operational flexibility and a bottom-line

Implied upsideperformance that substantially exceeded market expectations. Total revenue rose 5.6% y-y to +27.5%

CNY91bn, in line with Bloomberg consensus, while the consolidated non-IFRS operating loss at

Market Cap (USD mn) 67,354.3

CNY4.1bn was 41% lower than consensus of CNY7.0bn loss (Fig.1).

ADT (USD mn) 546.4

We believe this material outperformance is anchored by rapid unit economics (UE) improvement

at the Food Delivery (FD) business and highly disciplined loss management across New Relative performance chart

Initiatives. With key competitors like Alibaba (BABA US, Buy) signaling a disciplined focus on

profitability rather than aggressive spending, Meituan’s risk-reward profile has become

increasingly attractive. Consequently, we cut our FY26F net loss forecast by 73% while increasing

our net profit estimate for FY27F by 37% (Fig.5). These estimate revisions are driven by

improved FD UE, which we expect to narrow to -CNY0.24/order in FY26F before turning positive

to CNY0.31/order in FY27F (vs. a loss of CNY0.94/order in 2025, based on our assumption). We

upgrade Meituan to Buy from Neutral, and increase our SOTP-based TP to HKD109 (28% implied

upside) from HKD92 (Fig.6). The higher TP reflects an increased valuation for FD at USD16bn