Key Takeaways:
Meituan reported Q2 net profit of CNY 2.15 billion, up 490% from a year earlier, as food delivery subsidies normalized and core margins recovered.
"In the second quarter, our total revenue grew 14.4% year-over-year, and net profit turned positive," Chairman and CEO Xing Wang said.
Revenue rose 14.4% to CNY 104.64 billion, beating the CNY 101.08 billion consensus. Adjusted net profit reached CNY 2.52 billion, versus a market expectation of CNY 340 million, while adjusted EBITDA of CNY 4.1 billion topped the CNY 3.17 billion consensus. Core local commerce operating profit climbed 52.3% to CNY 5.67 billion, lifting the segment margin to 7.9% from 5.7% a year earlier — roughly 70% above the CNY 3.4 billion Wall Street expected. New initiatives revenue grew 25% to CNY 33.1 billion, with the operating loss narrowing to CNY 1.74 billion from the CNY 2.4 billion analysts forecast.
The turnaround follows a first-quarter loss of CNY 6.83 billion, leaving a first-half deficit of CNY 4.67 billion. R&D spending jumped 22.5% to CNY 7.67 billion, or 7.3% of revenue, driven by AI investment including the trillion-parameter LongCat 2.0 model. Cash and cash equivalents stood at CNY 104.72 billion at the end of June.
The results signal that Meituan has stabilized after a year of subsidy-driven competition with rivals including Alibaba's Ele.me and ByteDance's Douyin. Management said food delivery unit economics should improve year over year in the third quarter but weaken sequentially on summer marketing and courier costs, while in-store margins will decline in the second half as it invests. Keeta reached profitability in Hong Kong in October 2025 and in Saudi Arabia in July 2026, and the company expects 2026 new-initiative losses to stay below 2025 levels. Goldman Sachs and Jefferies reiterated buy ratings after the print. Investors will watch whether the margin recovery holds through the third-quarter peak season.
This article is for informational purposes only and does not constitute investment advice.
