UOB Kay Hian analyst Julia Pan downgraded the rating on Meituan to a Sell today, setting a price target of HK$100.00.
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Julia Pan’s rating is based on Meituan’s recent financial performance and market conditions. In the second quarter of 2025, Meituan’s earnings fell short of expectations, with a year-over-year revenue increase of 12% that still lagged behind both the firm’s and consensus estimates. The company’s non-IFRS net profit dropped significantly by 89% year-over-year, and its net margin decreased by 15 percentage points to 2%, failing to meet consensus expectations. This performance has raised concerns about Meituan’s ability to maintain profitability amid stiff competition, particularly in the food delivery sector.
Additionally, Meituan’s core local commerce segment showed signs of slowing growth, with revenue growth decelerating compared to previous quarters. The company’s on-demand delivery revenue growth was also sluggish, impacted by subsidies in food delivery and Instashopping services. Furthermore, while the new initiatives and others segment saw accelerated revenue growth, it also experienced a widening operating loss, primarily due to increased investments in overseas markets. These factors combined led Julia Pan to downgrade Meituan’s stock to a Sell rating, with a lowered target price of HK$100.00.
According to TipRanks, Pan is a 3-star analyst with an average return of 9.2% and a 50.00% success rate.