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<Research>Nomura Foresees MEITUAN-W Food Delivery Earnings Outlook Challenging; Stock Downgraded to Neutral
Recommend 17 Positive 18 Negative 20 |
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Competition in China's food delivery market has evolved into a protracted one, Nomura said in its research report. MEITUAN-W (03690.HK) is expected to keep facing competition across multiple business lines, with both its food delivery and in-store services being under constant competitive pressure. This persisted competition may keep Meituan's food delivery profitability fragile in the coming quarters. The in-store segment is Meituan's only profitable business in 3Q25, but its profitability is projected to be dented by competitors like Douyin's subsidy war to garner market share. Meituan's management lowered its long-term profit margin guidance for the in-store segment from approximately 35% to 25-30%, reflecting the escalating market competition. Nomura downgraded Meituan from Buy to Neutral, lowered its target price from HK$123 to HK$107, and reduced its operating profit forecasts for FY2025/ 26 by 65%/ 58%. AAStocks Financial News |
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