Why did Meituan's stock price fall despite impressive earnings?
Last week, Meituan $MEITUAN(03690.HK) just released its earnings report, and this morning it plummeted by 5%. Didn't they say the performance looked great? Friends who have researched Meituan might know that impressive earnings reports often fail to support the upward movement of its stock price. The market logic behind this is worth in-depth analysis, and digging deeper into its earnings report reveals 3 risk points.
Core Local Commerce: Hidden Concerns Under Steady Growth
Meituan's core local commerce segment performed steadily in 2024, with revenue growing by 21% to 250.2 billion yuan. Among this, the food delivery business further advanced supply chain innovation, with the peak daily order volume for instant delivery reaching 98 million orders on the day of the Start of Autumn.
Despite the strong growth in the core local commerce segment, market concerns remain. The aggressive entry of Douyin's group buying has pressured the commission rates for in-store business, dropping from the original 8-10% to 5.8%. Leveraging traffic subsidies and low-price packages, Douyin has impacted Meituan's in-store business territory, leading to shifts in the flow of merchants and users. Additionally, policy-level impacts cannot be ignored. Rising social security costs for delivery riders and new anti-monopoly regulations restricting "exclusive deals" have somewhat compressed Meituan's profit margins.
New Businesses: Narrowing Losses, Prospects Still Under Observation
Meituan's new businesses continued to improve operational efficiency in 2024, with operating losses narrowing to 7.3 billion yuan. However, the market's patience with Meituan's new businesses is gradually wearing thin. After years of development, community group buying and flash sales businesses have yet to turn a profit, and the previously expected profitability target for 2026 now faces uncertainty. Investors are beginning to question whether these new businesses can deliver sufficient returns in the future, and this uncertainty is reflected in the stock price.
Market Expectation Gap: The Root Cause of the Stock Price Decline
The core reason for Meituan's stock price decline lies in the market expectation gap. The market's pursuit of "certainty" has amplified the multiple short-term challenges Meituan faces. Competition from Douyin's group buying, ongoing losses in new businesses, and policy pressures have all raised doubts among investors about Meituan's future growth prospects. Although Meituan has demonstrated strong business growth capabilities in its earnings report, the market is more concerned about whether it can maintain sustained profitability and market share amid intensifying competition and changing policy environments.
It must be said that Meituan's report card is generally satisfactory, but more efforts are needed to enhance business competitiveness, optimize cost structures, and respond to policy changes to regain market confidence. For investors, focusing on how Meituan addresses competition in its core businesses, when new businesses can achieve profitability, and the resolution of policy risks will be key to judging Meituan's future investment value.
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