🚨 Meituan Down 31%: A Bargain in the Making or a Profit Trap?

Meituan has had a difficult year, with its share price falling 30.8% year to date to HK$71.50 as of 9 October 2026. But does the sell-off present an opportunity or is the market pricing in deeper problems?

📉 Valuation: Looks cheap but with a catch

Meituan’s price to book ratio (P/B) has fallen to 2.20x, near a five-year low. Its price-to-sales ratio is also around 0.97x.

The current trailing P/E is negative because the company reported losses. A low valuation does not automatically mean the stock is undervalued.

💰 Profit recovery is the key

Revenue continued growing, reaching HK$398.77 billion in FY2025. However, the company swung to a net loss of HK$25.53 billion. This is mainly due to Intense competition and subsidies in food delivery and instant retail remain major challenges.

Currently, Investors need evidence that profitability can recover sustainably.

⚖️ Regulatory risks add uncertainty

Beijing has opened an investigation into Meituan and three other travel platforms over suspected unfair competition and booking practices.

Currently, no news on the findings or penalties had been announced. Possible outcomes range from conduct changes to financial penalties or a more serious escalation.

🔍 What should investors watch?

The crucial questions are whether competitive spending eases, profits recover and the investigation remains limited in scope.

Meituan looks historically inexpensive on certain valuation measures but its future depends on earnings recovery.☺️ ( Looking at the weekly chart, Higher timeframe, it appears Meituan may have reached its bottom.)

Please refer to the infographic for the valuation figures, peer comparisons and three regulatory scenarios.

What do you think? Is this a potential turnaround story or a value trap?🤔

Not financially investment advice. Please do your own due diligence.

$MEITUAN(03690.HK)