Meituan Shares Slip on Quarterly Loss But Long-Term Trends Intact, Analysts Say – MarketWatch

Shares of Meituan fell in the morning session following a quarterly loss, even as several equities analysts maintained their buy ratings on the internet company’s growing market reach.
Beijing-based Meituan was recently down 7.8% at HK$243.80, putting it in line for its largest one-day drop since July. The company, which operates an online shopping and food delivery platform, on Friday reported a loss of more than US$1.5 billion in its third quarter, weighed by a US$500 million-plus antitrust fine, amid a wide-ranging tech crackdown by the Chinese authorities.
Citigroup described the overall results as “solid,” noting that all three of the company’s business segments were relatively in line with expectations despite some disruption from flooding, mobility restrictions and softer macroeconomic performance.
“Any short-term share price weakness [is an] accumulation opportunity for long-term investors,” it said. The bank maintained a buy rating but trimmed its target price to HK$342 from HK$364, partly to reflect likely higher losses stemming from investment in new initiatives in the fourth quarter.
Jefferies maintained a buy rating as well, saying the long-term trend of food delivery remained intact. “We affirm our positive view on the secular story for food delivery, as well as high margin of in-store segments in the early stage,” it said. “Meituan is expanding addressable market and boundaries via retail plus technology strategies.”
Jefferies said it expected fourth-quarter food delivery order volume and revenue to grow 17% and 18% on year, respectively, tempered by the ongoing pandemic and weaker demand due to macro headwinds. It retained a price target of HK$346, representing a more than 40% premium to shares’ current trading price.
Write to Justina Lee at [email protected]
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