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Meituan · 3690 · HKEX

Meituan runs China's dominant local-commerce platform — food delivery, in-store dining, hotel and travel booking, plus grocery and overseas delivery — earning commissions, merchant advertising and delivery fees on more than 150 million on-demand orders a day.

$10.3
Share price 9 Jul 2026 (HK$80.9)
~$64B
Market cap
$52.2B
FY2025 revenue +8.1% YoY
150M+
On-demand orders per day
Listed on HKEX in September 2018 at HK$69 (about $8.80), Meituan rode the local-services boom past $50 a share by early 2021, then de-rated for years through the platform crackdown. The subsidy war whipsawed it again — from about $13.6 down to an $8.20 low over the past year, closing near $10.30 on 9 July 2026.
2 · The shock

A subsidy war turned Meituan's profit engine into a loss — while demand kept growing

−$1.0B
Core Commerce op. profit FY2025 from +$7.2B in FY2024
−$3.3B
Group net profit/(loss) from +$4.9B in FY2024
+8.1%
Revenue growth to $52.2B users, frequency, ARPU at records
28.2%
Sales & marketing / revenue up from 19.0%, +61% to $14.7B

Revenue rose while the bottom line fell $8 billion — the signature of a margin shock, not a demand shock. Core Local Commerce's operating margin flipped from +20.9% to −2.6% as delivery subsidies ran through cost of revenue and gross margin compressed from 38.4% to 30.4%. Users kept ordering; Meituan simply had to buy those orders.

3 · The war

Two richer rivals invaded food delivery — and Meituan cannot end the fight alone

  • JD.com opened the front. It officially launched JD Food Delivery in February 2025, driving its New Businesses operating loss from $0.4 billion to $6.7 billion in a single year to force its way into Meituan's market.
  • Alibaba escalated it. It rolled out Taobao Instant Commerce at the end of April 2025 and made 30-minute delivery a strategic pillar; its China e-commerce adjusted EBITA fell 44% — roughly $12 billion — on the quick-commerce push.
  • Density kept the defender's bill lowest. Clearing 150 million daily orders for 600 million users, Meituan's own Core Commerce loss was just $1.0 billion — a fraction of its attackers' — but it names well-funded entrants as its lead corporate risk: the moat is efficiency-wide, yet rentable for as long as a rival chooses to fund the loss.
De-escalation is set by the attackers, not by Meituan — Alibaba still calls quick commerce 'a huge market opportunity.'
4 · The war chest

A net-cash fortress lets Meituan outlast the fight — but the cash engine ran in reverse

  • Liquidity is enormous and unencumbered. $23.9 billion of cash and treasury at end-2025, rising to about $26 billion by Q1 2026 — a net-cash position against roughly $11 billion of long-dated debt that carries no financial covenants. Even mid-war, in November 2025, it raised $2.0 billion plus about $1.0 billion of new notes.
  • The self-funding compounder inverted. Operating cash flow swung from +$7.8 billion to −$2.0 billion and free cash flow from +$6.3 billion to −$3.9 billion — an earnings-driven burn that tracks the operating loss, not a working-capital red flag.
  • Capital return stopped to fund the fight. Buybacks were all but halted and no final dividend was recommended for FY2025; separately, a marked venture book — 12.73% of Li Auto, plus stakes in Z.AI and Unitree — sits on the balance sheet, largely absent from the operating story.
It can afford to lose the price argument for as long as the fight lasts.
5 · The turn

One quarter on, the trough already looks like an event, not a new normal

  • The V is visible. Core Commerce's quarterly operating loss narrowed from $1.4 billion in Q4 2025 to $0.3 billion in Q1 2026, lifting the segment margin from −15.5% to −3.2%; management cited 'moderation of intense industry competition' and 'a more disciplined approach to subsidies.'
  • The model still travels. Keeta reached positive unit economics in Hong Kong in Q4 2025 and expanded across Saudi Arabia, the UAE, Qatar, Kuwait and Brazil — a live overseas proof point buried inside New Initiatives' loss.
  • The buffer kept building. Through the worst of the war, cash and treasury still rose to about $26 billion by Q1 2026, and group revenue grew 5.6% to $13.0 billion that quarter.
Two-thirds of the peak quarterly loss was clawed back in a single quarter.
6 · Which way it breaks

The whole case now turns on one line — does Core Commerce margin recover on stable volume?

  • For: a dominant franchise at a self-inflicted trough with a fortress balance sheet, a sharp Q1 2026 recovery already underway, record users and orders held through the war, and Keeta profitable in Hong Kong.
  • Against: the attackers set the pace and can fund $6–12 billion of annual losses from larger, still-profitable cores; management warns second-half 2026 order growth 'could turn negative'; and consensus FY2027 earnings have seen more downward than upward revisions.
  • The swing metric: Core Commerce operating margin — +19.7% in Q4 2024, −15.5% at the depth of the war in Q4 2025, −3.2% in Q1 2026. The quarter it crosses back above zero is the quarter the loss year becomes history.

Watchlist to re-rate: Core Commerce operating margin recovering toward high single digits for two straight quarters with stable-to-positive order growth; a visible pull-back in JD and Alibaba subsidies; and a resumed buyback — management's clearest signal that the war is won.