JPMorgan has upgraded Meituan Dianping to Overweight from Neutral, citing structural improvements in its food delivery segment and a higher earnings floor. The bank raised its price target on the Chinese platform to HK$100 from HK$85, reflecting confidence in sustained profitability despite seasonal cost pressures.
Macquarie separately increased its price target for Meituan to HK$113 from HK$93, maintaining a Superior Performance rating. The firm attributed the upgrade to cooling competitive pressures, as aggressive subsidies in the sector have eased, supporting margin recovery.
Meituan’s food delivery segment continues to dominate, holding roughly 70% market share in orders exceeding RMB 30 during peak competition periods. The company reported 27% revenue growth over the last 12 months, with a gross margin of 54%, while maintaining a net cash position. Despite these gains, Meituan remains unprofitable on a consolidated basis over the trailing twelve months.
China’s online retail sector expanded by 3% year-over-year in July, with total online sales reaching 1.65 trillion yuan, according to Macquarie data. Online penetration rose by 80 basis points to 42.3%, while total retail sales grew 0.6% in the same period.
Analysts expect the food delivery segment to remain profitable in the third quarter of 2026, despite higher courier costs and increased marketing expenditures. The upgrades follow a period of margin compression driven by intense competition, now stabilizing as competitive dynamics shift.
