Meituan's Food-Delivery Profitability Could Remain Resilient Despite Seasonal Pressure
Dow Jones
Sep 03
0615 GMT - Profitability for Meituan's food-delivery segment could remain resilient despite near-term seasonal pressure, says UOB Kay Hian's Julia Pan in a note. The Chinese food-delivery platform expects the segment's profitability to weaken in 3Q from 2Q, but to stay sufficient to cover any losses from the instant-shopping division, she says. Pressure on the company's food-delivery unit economics likely reflects summer-season competition and strategic investment, the analyst says. Meanwhile, in-store, hotel and travel segment margins are likely to normalize in 3Q amid softer travel demand and higher marketing expenses, she adds. UOB Kay Hian maintains its hold rating and 76.00 Hong Kong dollar target price. Shares decline 0.7% to HK$78.20.
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