Meituan

Meituan reported Q2 total revenue of RMB 104.6 billion, up 14.4% year over year. Cost of revenue ratio edged down to 66.5%, selling and marketing expense ratio fell to 23.6%, R&D expense ratio rose to 7.3%, and G&A expense ratio was 3.1%. The company turned profitable with total segment operating profit of RMB 3.9 billion and adjusted net profit of RMB 2.5 billion. Core local commerce revenue was RMB 71.5 billion, up 10.1%, while new initiatives revenue was RMB 33.1 billion, up 25%. Management said Q3 food delivery UE should remain positive but be lower sequentially due to seasonality, higher marketing, extra courier subsidies, and the nationwide rollout of occupational injury insurance; it also said the new initiatives segment loss in 2026 will not exceed that in 2025.

Xing Wang framed the quarter as evidence that Meituan’s retail-plus-technology strategy is working, with better business quality, stronger ecosystem economics, and continued progress in AI. He stressed that the company is using AI to bridge digital and physical commerce, improve merchant operations, and deepen its moat rather than trying to be a 'token factory.' His tone was confident and long-term focused, emphasizing disciplined growth, authentic user trust, and expanding grocery and overseas businesses in a measured way.

Shaohui Chen said the quarter benefited from improving marketing efficiency and more disciplined spending, which helped both revenue growth and profitability. He highlighted the cost ratio at 66.5%, selling and marketing at 23.6%, and the R&D ratio increase to 7.3% because of higher AI investment, while G&A stayed at 3.1%. He also pointed to cash and cash equivalents plus short-term Treasury investments of RMB 168.3 billion, an investment portfolio of nearly RMB 77.3 billion, and a RMB 22.2 billion fair value gain recognized in other comprehensive income rather than P&L. He said the company will evaluate investment monetization and share buybacks based on conditions and capital needs, with buybacks still the main return method.

Analysts focused on food delivery competition, in-store monetization, AI strategy, grocery retail expansion, and overseas investment pacing. Management said competition is shifting toward quality, service, and efficiency, and that Meituan’s lead in order volume and GTV remains strong, especially in the mid- to high-AOV segment. On Q3, management warned UE will be pressured sequentially by seasonality, higher subsidies, and new insurance costs, but still expects positive UE. On AI, management said LongCat 2.0 is for internal efficiency and product integration, not external model commercialization, and capital allocation will remain ROI-driven.