Meituan

Government anti-involution policies and strategic shifts by competitors like Alibaba and JD toward loss reduction signal that the worst of the subsidy war is over. Meituan's margin profile is expected to improve meaningfully through the second half of 2026 and into 2027, with aggregate platform losses projected to nearly halve.

Meituan has endured prolonged and significant margin pressure from heavy subsidy spending amid fierce industry competition. Technical indicators reflect ongoing weakness, with the stock holding sell signals from both short- and long-term moving averages, suggesting the financial damage from competitive battles may persist longer than optimists expect.

Macquarie projects Meituan to regain lost market share as competitors dial back aggressive investment, with unit economics showing sustained improvement from Q2 2026 onward. Multiple analyst upgrades from firms including Nomura, ICBC Research, and Jefferies further reinforce expectations of a structural recovery in the company's core delivery business.

Zephirin downgraded Meituan to Sell and maintains a price target well below consensus, while UOB Kay Hian also downgraded the stock, reflecting skepticism that market share gains can be sustained without continued heavy subsidies that would undermine any meaningful improvement in unit economics.

Competitors such as Alibaba are being urged by investors to exit low-margin grocery and delivery segments and refocus on cloud and AI, effectively ceding ground to Meituan. This strategic retreat by rivals could allow Meituan to consolidate its dominance in local services without facing existential competitive threats from better-capitalized tech giants.

China's broader macroeconomic fragility and deflationary pressures create an uncertain demand environment for Meituan's consumer-facing services. With analysts deeply divided — price targets ranging from HK$49 to HK$121 — there is no consensus on whether Meituan's local services model can generate durable returns in a structurally challenged consumption landscape.