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<Research>M Stanley: MEITUAN-W Profitability Roadmap Clear; Rating Overweight
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 2Q2...
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<Research>M Stanley: MEITUAN-W Profitability Roadmap Clear; Rating Overweight
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Morgan Stanley forecast that MEITUAN-W (03690.HK)  +0.150 (+0.205%)    Short selling $2.16B; Ratio 35.961%   '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.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-29 16:25.)

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