Key Takeaways
Meituan’s first-quarter operating loss from its core local commerce business is expected to narrow by ¥5.5 billion quarter-on-quarter, according to a new forecast from Citi.
The bank said in a report that it expects the division’s operating loss to be ¥4.6 billion for the first quarter of 2026. The performance is in line with both the bank's and the market's expectations for the Chinese food delivery and local services giant.
Citi attributes the significant improvement to stricter subsidy control by Meituan amid an improving and more rational competitive environment. The bank maintained its Buy/High Risk rating on the company’s stock, with a price target of HKD 110.
Looking ahead, Citi anticipates a further sequential improvement in the second quarter. The bank expects revenue from the core local commerce segment to increase from the first quarter, driven by seasonal peak demand and easing competitive pressures, which should cause the operating loss to narrow further.
The forecast suggests Meituan's focus on disciplined spending is beginning to yield significant results on its bottom line. Investors will be watching the official first-quarter results, expected before the end of May, to confirm the trend.
This article is for informational purposes only and does not constitute investment advice.
