Understanding the Market | MEITUAN-W rose over 5% as the company's Q1 performance exceeded expectations, with Q2 takeaway user experience expected to be significantly better than Q1
Meituan-W released its Q1 2026 performance, with revenue of 91 billion yuan, a year-on-year increase of 5.6%, and operating losses significantly narrowed to 6.5 billion yuan. Driven by better-than-expected performance and the reduction of losses in core local business and new ventures, the stock price rose over 5%. CMB International expects that as the competitive landscape rationalizes and the peak season effect in Q2 takes hold, the takeaway user experience (UE) will significantly improve, and the CLC business is expected to achieve profitability in Q2
According to Zhitong Finance APP, Meituan-W (03690) rose over 5% after its earnings report, reaching a 5.05% increase as of the time of writing, priced at HKD 82.2, with a transaction volume of HKD 1.222 billion.
In terms of news, on June 1, Meituan released its earnings for the first quarter of 2026. In this quarter, Meituan achieved revenue of RMB 91 billion, a year-on-year increase of 5.6%, with operating losses reduced from RMB 16.1 billion in the previous quarter to RMB 6.5 billion. Among them, the core local business reported an operating loss of RMB 2 billion, significantly narrowing from RMB 10 billion in the previous quarter; new business losses were RMB 2.1 billion, a notable decrease from RMB 4.6 billion in the previous quarter. Since the first quarter, Meituan has further consolidated its leading position in the mid-to-high value takeaway order market, continuing to expand its leading advantage over similar platforms in user experience (UE). If the competitive environment remains rational, coupled with the peak season effect in the second quarter, it is expected that Q2 takeaway UE will be significantly better than Q1.
CMB International believes that the better-than-expected performance is mainly due to the core local commercial business (CLC) losses being better than expected, as well as the new business losses being narrower than anticipated. In Q1 2026, CLC operating losses narrowed by 80% quarter-on-quarter, and the firm expects that as the industry competition landscape becomes more rational and takeaway user subsidies become more restrained, CLC business will achieve an operating profit of RMB 3 billion in Q2 2026. Excluding the impact of overall CLC investments related to member rights upgrades, it is expected that the takeaway business will return to breakeven in the peak season of Q2 2026
