Meituan profit jumps 490% as delivery competition eases

Meituan reported Q2 net profit of RMB 2.16 billion, up 490% year over year, as China's largest delivery platform returned to profitability.

"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 RMB 104.6 billion, beating the RMB 101.08 billion consensus. Adjusted net profit reached RMB 2.52 billion, up 69%, while adjusted EBITDA climbed 47.3% to RMB 4.1 billion, above the RMB 3.17 billion forecast.

The stock opened 2.5% higher at HKD79.45 on Aug. 31. JPMorgan raised its target to HKD100 from HKD85, and Citi lifted its price objective to HKD120 from HKD113, both citing structural margin improvement.

Core Local Commerce, which spans food delivery, in-store services, hotels and travel, generated revenue of RMB 71.5 billion, up 10.1%, with operating profit jumping 52.3% to RMB 5.67 billion. The segment's operating margin widened to 7.9% from 5.7% a year earlier, driven by reduced subsidy spending and a healthier order mix. Delivery service revenue returned to positive growth, rising 13.1% to RMB 26.8 billion.

New Initiatives, including grocery retail and the KeeTa overseas delivery app, posted revenue of RMB 33.1 billion, up 25%, while the operating loss narrowed to RMB 1.74 billion from RMB 1.88 billion. Xiaoxiang Supermarket now operates in 68 cities, and KeeTa reached stable profitability in Hong Kong and Saudi Arabia.

R&D spending climbed 22.5% to RMB 7.67 billion, or 7.3% of revenue, as Meituan stepped up investment in artificial intelligence. The company launched LongCat 2.0, a trillion-parameter foundation model trained on domestic infrastructure, and is deploying AI agents across restaurant, retail and hotel categories.

Management expects food delivery unit economics to improve year over year in the third quarter, though seasonality and higher courier subsidies will weigh on sequential results. In-store margins are likely to decline in the second half as Meituan invests to defend its competitive position. New Initiatives losses in 2026 will not exceed 2025 levels, the company said.

The first-half loss of RMB 4.67 billion, dragged by a RMB 6.83 billion first-quarter deficit, leaves Meituan dependent on second-half momentum. Cash and short-term treasury investments totaled RMB 168.3 billion at the end of June, giving the company room to fund grocery expansion and overseas growth. Investors will watch third-quarter margins for evidence the profit recovery holds.

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