China’s food delivery sector is in full-blown combat mode—and Meituan just took a direct hit.
Adjusted net profit plunged 89% to RMB1.49B, missing expectations by a mile (RMB9.85B).
Margins collapsed as Meituan burned cash defending its 70% market share against JD Takeaway, Ele.me (Alibaba), and PDD’s aggressive promos. 📉💸
🔥 The Delivery War: Who’s Bleeding?
• 📦 Meituan: Operating margin shrank from 25.1% → 5.7%
• 🛵 JD & Alibaba: Pledging billions in subsidies
• 🧾 Regulators: Eyeing pricing rules amid merchant complaints
Meituan’s international push (Keeta) and drone delivery bets are bold—but expensive.
The stock’s down 52% from its October peak, now hovering near HK$103.
My PT? HK$95–115 range until margin visibility improves. RSI is oversold, but no clear reversal yet.
🧠 What About Alibaba?
Alibaba reports August 29. Street expects:
• 📈 Revenue: RMB266B (+9.4% YoY)
• 📉 Adjusted EBITA: RMB35.3B (–21.7% YoY)
Food delivery (via Ele.me) is a strategic lever—not a profit center.
Expect margin pressure, but cloud and e-commerce should buffer the hit.
Still, local commerce EBITA could surprise to the downside.
🧨 Is PDD Risk Gone?
Not quite.
PDD beat earnings—but management warned:
Bottom Line:
Meituan’s margin collapse is a wake-up call.
Alibaba may dodge the worst—but delivery wars are dragging everyone’s EBITA.
PDD’s risk isn’t gone—it’s just priced in (for now).
Watch for signs of capital rotation away from high-burn platforms. 🧭
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