Meituan (美团) faces 2026 dilemma: can heavy losses be a long‑term defensive play?

Market pressure and the numbers

Meituan (美团), China’s dominant local services super‑app, has opened 2026 under pressure. Its Hong Kong‑listed share price has slid since January and reportedly briefly pushed the market value below HK$500 billion after a volatile session in late February. The immediate trigger is the company’s February profit warning: Meituan now expects a 2025 net loss of RMB 233–243 亿元 (about RMB 23.3–24.3 billion), versus RMB 358 亿元 (RMB 35.8 billion) net profit in 2024 — a swing of roughly RMB 59–60 billion. Management also warned that the loss pattern will likely extend into 2026 Q1.

Why the hit? Competition and deliberate spending

The company says the swing is primarily from its core local commerce segment, which moved from operating profit in 2024 to a projected operating loss in 2025, compounded by stepped‑up overseas investment. Meituan lists targeted increases in consumer marketing, rider incentives and merchant support as the driver. These are explicit defensive moves: expanded rider pensions and benefits, rental subsidies and “rider apartments,” a RMB 28 亿元 top‑up for merchant health under the “Prosperity Plan,” and the RMB‑scale integrations behind its October flash‑sales initiatives. It also closed a reported US$717 million deal to buy Dingdong Maicai’s China business on Feb. 5 to shore up fresh‑food supply chains.

Strategy, context and the outlook

Is Meituan gambling on short‑term pain for long‑term moat? That is the company line. Management stresses the business is operating normally and that cash reserves remain ample — as of Sept. 30, 2025 Meituan held RMB 992 亿元 (about RMB 99.2 billion) in cash and RMB 421 亿元 (about RMB 42.1 billion) in short‑term investments. It is also expanding internationally with Keeta in the Middle East and Brazil. But the competitive backdrop is severe: Alibaba (阿里巴巴) and JD.com (京东) are all-in on delivery and instant retail, and it has been reported that Alibaba told staff it will “very boldly” ramp up investment in Taobao Flash Sales to try to overtake Meituan’s share within three years. Can market patience, deep pockets and a tightened ecosystem buy Meituan the advantage it is paying for? That will be the central question for investors and regulators watching China’s reshaped internet battleground in 2026.