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<Research>M Stanley: MEITUAN-W Profitability Roadmap Clear; Rating Overweight
Recommend 31 Positive 54 Negative 29 |
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Morgan Stanley forecast that MEITUAN-W (03690.HK)'s Core Local Commerce (CLC) will chart an operating loss of RMB4.3 billion in 1Q26 and is expected to achieve breakeven in 2Q26. Among which, the instant delivery business is estimated to post an operating loss of RMB8.4 billion in 1Q26, narrowing to RMB4.4 billion in 2Q26. This implies that the unit economics (UE) per order for the food delivery business will be negative RMB1.3 in 1Q26 and negative RMB0.6 in 2Q26, reaching breakeven in 3Q26. After Alibaba committed to substantially narrowing losses in Quick Commerce, the visibility of MEITUAN-W's roadmap toward profitability has improved drastically. The broker believed faster-than-expected narrowing of food delivery losses would wreak upside risk. Morgan Stanley maintained its earnings forecasts for MEITUAN-W and continued to assume that the food delivery business will achieve UE of RMB1 per order starting from 2027. Under its base case, the operating margin of the IHT will gradually recover from the current 25% to 30% by 2030. The broker maintained its Overweight rating on MEITUAN-W with TP kept unchanged at HKD120. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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