Meituan Faces Significant Stock Decline Amidst Revenue Growth and Profitability Challenges.

Meituan's stock declined 10% after reporting an 11.7% increase in revenues to RMB91.8 billion in Q2, but a decline in profits from its core commerce sector to RMB3.7 billion and expanded losses from new ventures to RMB1.9 billion. The company faces intense competition from Alibaba and JD.com, making it challenging to sustain profitability and drive growth.

Meituan's stock declined by 10% after reporting its Q2 2025 earnings, with revenues increasing by 11.7% to RMB91.8 billion, but a significant drop in profits from its core commerce sector to RMB3.7 billion and expanded losses from new ventures to RMB1.9 billion. The company is facing intense competition from Alibaba and JD.com, making it challenging to sustain profitability and drive growth.

Meituan's Q2 revenue growth was primarily driven by its Core Local Commerce segment and instant retail expansion, with revenues increasing by 11.7% year-over-year (YoY) to RMB91.8 billion [2]. However, the company's operating profit fell to RMB2.26 billion, a 48.0% decrease compared to the previous year, while the period profit dropped to RMB3.65 billion, down by 96.8% YoY [2]. The company's operating profit margin for food delivery services declined to 10.8%, down from 17.8% in Q1 2025, due to aggressive subsidies from rivals such as JD.com and Alibaba [2].

The stock market reacted to the earnings report, with the implied volatility of Meituan's options market indicating a potential single-day price fluctuation of 4.56% [1]. This reflects the uncertainty surrounding Meituan's ability to maintain its market share and profitability in the face of intense competition. The company's management has indicated its willingness to defend its market leadership in the food delivery business, which remains the strategic core of the company [2].

Analysts have expressed concern about Meituan's strategic resilience and its ability to navigate the competitive landscape in the food delivery and instant retail markets. The company's performance in the second quarter will be a crucial test of its strategic resilience and its ability to adapt to the changing market dynamics [2].

References:
[1] https://news.futunn.com/en/post/61065774/a-preview-in-one-chart-meituan-s-q2-earnings-report
[2] https://www.ainvest.com/news/chinese-technology-company-meituan-reports-q2-revenue-91-84-bln-yuan-11-7-yoy-operating-profit-2-26-bln-yuan-48-0-yoy-period-profit-3-65-bln-yuan-96-8-yoy-2508/