Meituan beats 1Q26 estimates as core commerce loss narrows 80%

Meituan reported a non-IFRS adjusted loss of RMB4.97 billion for 1Q26, beating consensus estimates by nearly RMB2 billion.

The sharp narrowing of the core local commerce loss "exceeded expectations" and confirms that competition in food delivery and Quick Commerce has eased, Citi analysts said in a note. The broker maintained a Buy/High Risk rating with a HKD110 target price.

Total revenue reached RMB91.04 billion, up 5.6% year over year, slightly above Citi's RMB90.63 billion estimate and the market's RMB90.8 billion consensus. Core local commerce revenue edged up 0.1% to RMB64.06 billion, while its operating loss narrowed to RMB2.03 billion — outperforming Citi's RMB4.56 billion loss forecast and the market's RMB4.38 billion estimate. New business revenue jumped 21.3% to RMB26.98 billion, with an operating loss of RMB2.12 billion, also better than Citi's RMB2.6 billion projection.

The results signal a potential inflection point for Meituan's profitability. Citi said it "would not be surprised" if the core local commerce segment returns to breakeven or turns profitable in 2Q26, as competitive pressures continue to ease.

Delivery services revenue fell 2.9% year over year to RMB25 billion, accounting for 27.5% of total revenue. Merchandise revenue within core local commerce and new business segments recorded year-over-year growth of 96% and 41%, respectively, reflecting expansion in pharmaceutical and alcohol categories under MT Instashopping and the growth of Xiaoxiang Supermarket.

The stock rose 4.4% to HKD81.70 on June 2, with turnover of HKD2.38 billion.

The narrowing loss trajectory suggests Meituan's profitability roadmap is becoming clearer after quarters of heavy investment. Investors will watch for further margin improvement in 2Q26, when Citi expects the core local commerce segment could reach breakeven.

This article is for informational purposes only and does not constitute investment advice.