CLSA Expects MEITUAN-W 1Q26 Food Delivery Loss to Narrow Sharply QoQ to RMB7B

CLSA said in a report that MEITUAN-W (03690.HK) +0.200 (+0.243%) Short selling $1.19B; Ratio 35.188% 's food delivery subsidy war is expected to gradually ease, but its in-store services will still face competitive pressure. The broker expects MEITUAN-W's total revenue in 1Q26 to grow 5% YoY to RMB91.2 billion, with adjusted Lbit (loss before interest and tax) narrowing QoQ to RMB7.1 billion.CLSA expects MEITUAN-W's core local commerce revenue in 1Q26 to remain flat YoY, while losses narrow to RMB4.5 billion, mainly because the company has focused subsidies on high-value users and core in-store categories. Adjusted Lbit for new businesses is expected to narrow QoQ to RMB2.6 billion, as Keeta concentrates on existing markets. The broker maintained its adjusted net profit forecast and TP at HKD120, reiterating an Outperform rating.CLSA expects MEITUAN-W's food delivery revenue in 1Q26 to decline 7% YoY to RMB37.9 billion, mainly due to lower average order value and commission rates, while order volume increased only 7% amid Lunar New Year competition. However, as MEITUAN-W has focused subsidies on high-value users and high average order value orders, food delivery losses are expected to narrow sharply QoQ to RMB7 billion, compared with RMB13 billion in 4Q last year. In March, MEITUAN-W's food delivery order and GMV market share remained at about 50% and 60% respectively, with average daily orders of around 62 million. From April to May, as major competitors reduced subsidies, market share may increase by 1 to 2 ppts. Loss per order in food delivery is expected to further improve to RMB1.