Citi Lifts Meituan Target to HKD110 on Improved Efficiency
Citi analysts upgraded Meituan (03690.HK) to 'Buy/High Risk' from a 'Neutral/High Risk' rating, increasing their price target for the company to HKD110 from HKD94. The revision signals growing confidence in Meituan's operational performance, driven by a significant quarter-on-quarter improvement in its food delivery unit economics during the fourth quarter of last year. The bank expects this positive financial trend to extend into the first quarter of this year, crediting the gains to a strategic focus on attracting high-quality users and securing orders with a higher average value (AOV).
Overseas Expansion Validated as Hong Kong Operations Turn Profitable
Meituan's international strategy received a key validation as its food delivery service in Hong Kong, Keeta, achieved profitability. This successful execution in a competitive new market strengthens the case for the company's global ambitions and demonstrates a viable model for entering and monetizing new regions. Extending this outlook, Citi anticipates that Meituan's newer operations in Saudi Arabia could also reach positive unit economics by the end of 2026.
Core E-Commerce on Track for Q3 Profitability
A primary catalyst for the stock is the expected turnaround in the company's core local e-commerce (CLC) division. Citi projects this segment will return to profitability in the third quarter of this year. An earlier positive signal may emerge in the second quarter, as narrowing losses could provide a near-term boost to the stock price. While Citi acknowledges that competitive uncertainties remain, the significant reduction in losses from the instant delivery business is an encouraging sign of disciplined execution.
Edgen Stock·Mar 27 2026, 03:51
