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Slight miss in 3Q25, but CLC operating loss expected to narrow in 4Q25. Meituan delivered 3Q25 revenue of RMB95.5bn, up 2% YoY but 2% below consensus. Core Local Commerce (CLC) revenue declined 2.8% YoY to RMB67.4bn (consensus expected flattish YoY). Revenue from New Initiatives rose 16% YoY to RMB28bn, slightly below the 17% consensus estimate. CLC operating loss widened to RMB14.1bn (vs. consensus loss of RMB13bn), with an operating margin of –21% (consensus –19%). New Initiatives performed better than expected, posting an operating loss of RMB1.3bn, versus consensus of a RMB2.3bn loss. Adjusted net loss reached RMB16bn, slightly larger than the RMB14bn consensus loss. Looking ahead to 4Q25, management explicitly guided that operating losses will remain elevated at both CLC and group levels due to intensified competition. However, they emphasized that the current competitive landscape is unsustainable, and CLC operating loss is expected to narrow in 4Q25.
Lower competition intensity in Food Delivery in upcoming quarters. Management noted that competitive intensity in food delivery has eased since Singles’ Day, enabling Meituan to recover market share in order value while maintaining leading GTV share, supported by its strong high-AOV user base. The food delivery segment is still expected to incur notable operating losses in 4Q25, depending on December competition levels. Longer term, the company expects the market to shift from capital-driven subsidy battles to efficiency-driven competition, as aggressive subsidies generate unsustainable short-term traffic gains.
Growth in Branded Flagship InstaMart and investments in user experience. Management highlighted that Instashopping operating loss may slightly widen in 4Q25 versus 3Q25, driven by increased investments to support user experience during Singles’ Day and other promotional campaigns. Despite short-term pressure, management remains confident in restoring profitability and achieving sustainable mid- to long-term margins. Under the new competitive landscape, Meituan launched Branded Flagship InstaMart in October. During the Singles’ Day Festival, hundreds of partner brands achieved over 300% YoY sales growth, demonstrating the potential of deeper omni-channel brand collaboration.
Facing rising competition in the in-store (IHT) business. Competition in in-store, hotel and travel (IHT) continues to intensify, driven by Amap’s map-based discovery products and Douyin’s commission-based traffic ecosystem. IHT GTV growth moderated to 18% in 3Q25 (vs. mid-to-high-20s in 2Q25). Management expects IHT GTV margins to decline further in 4Q25, before normalizing longer term toward the ~30% margin level. Meituan continues to differentiate itself through category mix, merchant scale, and strong user mind-share, supported by more than 25 billion authentic reviews. The company will continue optimizing the ecosystem (refined rating criteria), advancing technological tools (VR store tours, smart in-store ordering), and upgrading operations to defend long-term leadership.
Technology innovations and progress in AI. Meituan provided updates across its AI strategy: 1) AI Models: LongCat LLM (open-sourced), receiving strong user feedback. 2) AI Agents/Chatbots: Xiao Mei standalone chatbot and Wen Xiao Tuan within the Meituan App, supporting dining, accommodation, shopping, service comparisons and order placements. 3) Merchant Tools: Upgraded AI productivity tools for local merchants with customized business solutions. 4) Internal Efficiency: AI-assisted coding and workflow automation to improve operational efficiency.
Keeta accelerates global expansion in Hong Kong, Middle East, and Brazil. Management highlighted that Keeta turned profitable in Hong Kong in Oct 2025, only 29 months after launch—faster than originally expected. Profitability is expected to continue improving QoQ. In the Middle East, Keeta is expanding rapidly across Saudi Arabia and newly launched regions including Qatar (Aug 2025) and Kuwait/UAE (Oct 2025). Management sees substantial opportunities given the region’s diverse cultures and under-penetrated restaurant supply. Brazil also presents attractive potential as a top-5 global GTV market, with a uniquely high share of phone-based ordering. The company believes it can successfully replicate Mainland China's food delivery experience there. Management reiterated that New Initiatives losses for FY26 will not exceed FY25.
Rebound in market share among high-AOV orders. On the call, management emphasized Meituan's strong positioning in mid- to high-value orders, holding: ~67% GTV share for orders above RMB15; >70% GTV share for orders above RMB30. This underscores Meituan’s brand strength among high-value users compared to competing platforms.
Valuation. Meituan trades at HK$102.5/share, with a market cap of HK$626.4bn. Consensus estimates for CY26 EBITDA stand at HK$44.7bn, implying an 11.7x EV/EBITDA multiple versus peer average of 9.8x. The valuation premium has compressed due to heightened competition in food delivery, leading to higher subsidy and marketing spend and weighing on adjusted net income and EBITDA. As competitive pressure normalizes, we expect profitability to recover meaningfully, offering potential upside.
