Preview Infographic | Meituan's earnings report is coming soon, huge losses are a foregone conclusion, and the turning point to profitability awaits verification

$MEITUAN-W (03690.HK)$ The earnings report will be released on March 26 Beijing time. Institutional forecasts expect revenue of 92.152 billion yuan for Q4 2025, with an expected loss per share of -2.488 yuan. (The above data uses International Financial Reporting Standards)。

As early as February, the company had issued a profit warning, and the market had already fully anticipated the loss base for the full-year performance.A net loss of 23.3 to 24.3 billion yuan is expected for the full year, representing a nearly 60 billion yuan profit reversal from the 35.8 billion yuan net profit in 2024. This forecast is slightly higher than the market's general expectation of a 23.6 billion yuan loss. The core local commerce segment has shifted from an operating profit of 52.4 billion yuan in 2024 to an operating loss of 6.8 to 7 billion yuan for the full year.

For investors, there is no need to overly focus on the realized loss figures for 2025. The core value of this earnings report lies in clarifying key issues such as industry competition turning points, core business profitability recovery paths, overseas expansion pace, and long-term valuation catalysts through management guidance and business details, providing crucial references for investment pricing in 2026.

I. Instant retail: Market share bottom line secured, strategic costs paid, focus on 2026 investment guidance

From the perspective of instant retail market share, despite substantial investments, Meituan's core market share has not experienced significant erosion.Meituan’s strategic investment to safeguard its basic market position is projected to approach 97 billion yuan in annual sales and marketing expenses, with a year-on-year increase exceeding 55%.According to JPMorgan data from November 2025, Meituan’s food delivery order volume share is about 50%, while its GMV-based share stands at approximately 60%.

The price war in 2025 has imposed enormous costs on all industry players. Based on currently trackable industry information, Alibaba's total flash purchase budget for 2026 is roughly flat compared to 2025, but quarterly spending is expected to be smoother, with significantly reduced intensity per quarter. Subsidy investments for JD.com's food delivery are also expected to contract.An initial trend of easing industry competition has emerged.

In this earnings report, investors should focus on locking down two key signals:

First, the management's guidance on losses for Q1 2026, the company had previously indicated that the loss trend would continue into Q1; if the quarterly loss can be contained, it will directly confirm a systemic easing of competitive intensity in the industry, becoming the first positive signal of profit recovery;

Second, user retention and changes in order structure after subsidy reductions,The retention rate of low-price orders following subsidy cuts will directly determine the 'value' of Meituan’s market share, which is also the core factor in assessing the long-term industry landscape.

Second, in-store dining and travel: resilience of the profit pool amid Douyin's slow-burning impact

Compared to the visible impacts of the food delivery war, the structural challenges faced by the in-store dining and travel businesses cannot be ignored.

According to LatePost, Douyin’s full-year GTV for its lifestyle services is expected to exceed 800 billion yuan in 2025, up nearly 60% from 560 billion yuan in 2024, with the gap between Douyin and Meituan’s in-store business steadily narrowing. More crucially,Douyin has significantly improved its redemption rates,with overall redemption rates rising from just 30% at the beginning of 2024 to 70% for search-based redemptions by the end of 2024, while live-streaming redemptions reached 50%. The 'post-redemption market share safety net' that Meituan previously relied on is being continuously eroded.

In 2026, Douyin launched an independent group-buying app called 'DouShengSheng', breaking the previous boundary where 'Douyin focused on impulse purchases and Meituan on planned purchases,' directly entering Meituan's core search-and-compare pricing scenarios. As Meituan’s former key profit generator, the in-store dining and travel business contributed about 27 billion yuan in operating profits in 2024, but its profit margin has already started declining under dual competitive pressures in 2025.

In this earnings report, the market needs to focus on the changes in operating profit and profit margin of this business, as well as management's strategies for competition in 2026.Compared to short-term fluctuations in market share, whether the business’s profit margin can stabilize or if there will be a permanent decline is the key concern. The core objective of TikTok's local life services business is traffic monetization rather than independent profitability, meaning Meituan will need to maintain profitability in a market where 'competitors don’t need to be profitable,' with persistent cost pressures.

Third, overseas business: Profit realization in the GCC markets and expansion risks in Brazil.

In 2025, when domestic operations are caught in price wars, overseas business becomes a relatively clear growth narrative for Meituan and an important observation window in this earnings report.Currently, Keeta’s overseas expansion exhibits polarized characteristics, with significant divergence in market expectations.

Meituan has chosen the Middle East and Latin America, avoiding the intense competition in Southeast Asia, attracted by the low penetration rates and high average order values in these regions. In the Middle East, Keeta’s expansion has already validated the replicability of its model.In less than a year since launching in Saudi Arabia, it has covered all major cities, ranking among the top three in market share and consistently topping local app store download charts. The Middle East market naturally features high average order values and strong user willingness to pay, offering significantly better profitability than the domestic market. However, with the total population of the GCC six countries being less than 60 million, the market size ceiling is evident, making it difficult to support Meituan’s long-term growth story.

The competitive intensity in Brazil is high, determining the success of the overseas venture. In 2025, Brazil’s online food delivery market is projected to reach $20.9 billion, nearly equivalent to the entire Southeast Asian market, and Meituan announced its entry in May 2025, planning to invest $1 billion over five years.However, the competitive barriers in this market are much higher than in the Middle East.Local leader iFood holds nearly 80% of the market share, with a strong user mindset and network effects already established. Additionally, Didi relaunched its food delivery service in Brazil in April 2025, directly competing with Keeta. The level of competition in Brazil far exceeds expectations.

In this earnings report, investors need to focus on Keeta's city expansion pace and investment budget for 2026.Management previously indicated that losses in the new business segment in 2026 will not significantly increase compared to 2025. This means that Keeta's incremental investment needs to be offset by reduced losses in domestic new businesses. If unexpected competition in the Brazilian market leads to investment exceeding guidance, it will directly impact market expectations regarding the company’s profit recovery pace.。

At the same time,The impact of geopolitical conflicts in the Middle East also requires close attention.A decline in local consumer confidence, rising fulfillment costs, and stricter license approvals may extend the profitability cycle in the Middle East market, posing a significant risk factor.

IV. Has the darkest hour passed? The turning point in profitability awaits verification.

Meituan's stock price fell from its high of HKD 217 in October 2024 to below HKD 80 in March 2026, with a maximum drop of over 60%. The core pressure came from the collapse of profit expectations.The consensus among most sell-side analysts is that Q3 2025 marked the lowest point in this round of performance, and a true profit reversal is likely to occur in the second half of 2026. This earnings report needs to provide verifiable evidence to support this consensus.

2026 will be a critical year of validation for Meituan. Domestic food delivery operations must transition from losses to profitability, the in-store business must stabilize its profit pool amid ongoing competition, and international operations must consolidate their foothold in the Middle East while achieving breakthroughs in the Brazilian market. Multi-front operations pose extremely high demands on the company’s capital allocation and management capabilities.

Looking at the path to profitability recovery, if the price war in food delivery continues to ease in 2026, core local commerce could return from substantial losses in 2025 to a slight profit. A full valuation recovery hinges on the substantive verification of a profit inflection point in the second half of 2026. In this earnings report, the full-year investment and profit recovery guidance provided by management will directly determine whether the market will price in this expectation early. If guidance falls short of expectations, the valuation recovery process will be significantly delayed.

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