Is it time to reevaluate Meituan?

Asking AI · How Regulatory Tone Will Reshape Meituan’s Valuation Logic?

On March 26, Meituan released its full-year 2025 and fourth-quarter financial reports. Just one day before the earnings release, regulatory authorities reposted an article from the Economic Daily titled “The Takeout War Should End,” marking the official conclusion of the intense “Takeout War.”

There was no true winner in this takeout battle. Industry participants collectively burned through over 150 billion yuan in profits, yet the industry as a whole did not experience a substantial shift in its business model. Meituan paid a heavy price for this: profits turned into losses, with a full-year net loss of 23.4 billion yuan, and its core local commerce segment, acting as the ballast, was completely drained, recording an operating loss of 6.9 billion yuan.

However, this financial report did not trigger a stock price shock. On one hand, prior earnings forecasts had already prepared the capital market psychologically; more importantly, the market had long shifted its focus to the “post-war” period. The regulatory tone set a brake on price wars once again. Under this clear regulatory stance, Meituan’s stock price once surged by 14%, and the market expressed approval of the “war’s end.”

So, what other key points are worth noting in Meituan’s financial report? How will the company’s investment logic evolve into 2026?

Core Local Commerce Holds Up Under Pressure

Reviewing Meituan’s Q4 2025 data, after the fierce takeout battles in Q3, Meituan, as the defensive side, successfully stabilized its position.

First, on the revenue side, performance growth experienced a gentle recovery. The report shows that in Q4 2025, Meituan achieved a total operating revenue of 92.1 billion yuan, up 4% year-over-year (better than Q3’s 2%). Breaking it down further, revenue from core local commerce slightly declined by 1% year-over-year, a significant improvement from the 2.8% drop in Q3, which was the main reason for the recovery in revenue growth.

However, the decline in core local commerce revenue contrasted with market perceptions of “exploding takeout orders,” primarily due to the accounting treatment of subsidies. Part of the takeout subsidies issued by the platform are recorded as sales expenses, while another part directly reduces operating revenue (such as delivery service income and commissions).

CICC statistics show that in Q4, Meituan’s takeout order volume increased by 11% year-over-year, but due to subsidy offsets, the actual recognized delivery service income decreased by 10% year-over-year, leading to a decline in core local commerce revenue. Therefore, from an operating revenue perspective, if subsidies are excluded, Meituan could have achieved a higher performance growth rate.

Market share data also supports this: based on GTV (Gross Transaction Value), the company still holds over 60% of the market share.

On the profit side, Meituan’s Q4 loss reduction was also significant. In Q4, operating losses from core local commerce narrowed to 10 billion yuan from 14.1 billion yuan in Q3. Considering that revenue from core local commerce in Q4 (64.8B yuan) was roughly the same as in Q3 (67B yuan), this quarter-over-quarter loss reduction of over 4 billion yuan clearly indicates that the narrowing of operating losses was not solely due to scale expansion but also a direct result of the company actively improving operational efficiency.

Beyond financial data, Meituan’s pace in instant retail business remained unaffected by the takeout war. Through innovative models like the Lightning Warehouse for branded goods and self-operated front warehouses, it is expanding “30-minute delivery of everything” from food delivery to daily necessities, 3C electronics, and other categories.

At the earnings call, Meituan disclosed that through close cooperation with top alcohol brands, its alcohol business achieved rapid growth. In healthcare, the company continued to strengthen local supply of common household medicines and medical devices, supported the online debut of many innovative drugs, and further expanded coverage of 24-hour pharmacies, online consultations, and home testing services.

Meanwhile, Meituan remains committed to the ecosystem win-win philosophy, continuously increasing protections for couriers, merchants, and consumers. For merchants, it promotes the “Bright Kitchen” initiative, encouraging restaurants to open their kitchens for live streaming through hardware subsidies and cash incentives. For couriers, Meituan has pioneered nationwide coverage of courier pension subsidies and launched the industry’s first comprehensive pension plan for all types of couriers.

New Business Breaks Through the Trillion-Yuan Mark

While the market focused on subsidies in core local commerce, Meituan’s new business segment quietly achieved a historic breakthrough.

Financial data shows that in 2025, Meituan’s new business segment (mainly overseas expansion and Xiaoxiang Supermarket) reached a total revenue of 1.04 trillion yuan, a 19% year-over-year increase, surpassing the trillion-yuan milestone for the first time.

This milestone was achieved through precise industry trend tracking. In recent years, returning to offline and near-field retail has become a consensus in the retail industry. Whether it’s Walmart launching community stores, Oriental Zhenxuan announcing offline stores, or companies like Seven Fresh and Hema accelerating their offline expansion, all confirm this trend. In this wave of near-field retail, Xiaoxiang Supermarket is not only a key participant but also a crucial part of Meituan’s grand “everything to home” ecosystem.

According to disclosures, Xiaoxiang Supermarket has deepened its focus on the underlying supply chain, continuously strengthening its fresh produce quality moat, and is accelerating its nationwide expansion. By the end of 2025, it had successfully covered 39 key cities across the country. Strategically, Xiaoxiang Supermarket relies on high-frequency fresh produce as its core, and is expanding into categories like snacks, daily cleaning, personal care, beverages, and even some 3C appliances, effectively supplementing the depth of supply in instant retail’s self-operated goods.

If Xiaoxiang Supermarket is rooted domestically in retail, Keeta’s multi-directional push is elevating its presence overseas. In terms of international expansion, Keeta’s global footprint is accelerating: after entering Hong Kong and Saudi Arabia, in the second half of 2025, Keeta further launched in Qatar, Kuwait, and the UAE, covering major Gulf countries and expanding into Brazil.

While scaling rapidly, Keeta’s business model is also continuously optimized. According to company disclosures, in Q4, Keeta achieved unit economic benefit (UE) profitability in Hong Kong; in Saudi Arabia, orders grew rapidly throughout the year, making it one of the most favored platforms there. Keeta aims to achieve monthly UE profitability in Saudi Arabia by the end of 2026, a shorter timeline than Hong Kong’s 29 months.

Imagination Turns to AI

Since 2026, the explosive rise of OpenClaw has significantly advanced AI commercialization, with “Token Economics” sweeping the global market. However, while the public’s attention is generally on cloud providers and independent large model companies, Meituan is often still viewed as a traditional consumer internet platform, overlooking its AI initiatives. In fact, AI is also a key factor in breaking through Meituan’s future valuation ceiling.

Meituan’s AI strategy is not just on paper. During the earnings call, it was disclosed that since 2023, the company has made large-scale investments in capital expenditure and top AI talent recruitment. In 2025, Meituan’s R&D investment hit a new high, growing 23% year-over-year to 26 billion yuan, with R&D expenses exceeding 7%.

[Chart: Changes in Meituan’s R&D expenditure, sourced from Wind and 36Kr]

Unlike many companies currently obsessed with building “Token factories” or general-purpose large models, Meituan’s AI path is unique: focused on creating an AI foundation and action capabilities for the physical world. This strategy is not deliberately seeking differentiation but is based on the reality of local service industries, which are highly non-standard and delivery is complex.

In local life scenarios, massive merchant information is highly dispersed, much data remains undigitized, and the platform needs to finely control offline fulfillment and delivery. This means Meituan’s AI must not only have a “brain” capable of understanding the complex needs and data of the real world but also possess “limbs” to execute complex offline tasks.

To this end, Meituan has built deep capabilities on both hardware and software fronts:

On the software side, it promotes deep integration of large models with real-world physical data. Relying on vast merchant POI data, dynamic operation data, and authentic local service user reviews, combined with self-developed multimodal LongCat series large language models and open-source models, Meituan has launched AI assistants “XiaoMei” and “XiaoTuan” for users, enabling AI technology to truly land in real consumption scenarios.

For example, “XiaoTuan” can quickly extract high-value information from vast online reviews, accurately infer and meet users’ personalized needs. Data shows that during the 2026 Spring Festival, over 104B users used “XiaoTuan” to plan dining, entertainment, and travel; it verified 700 million merchant information entries nationwide and used 1.3 billion real user reviews for secondary calibration, driving offline consumption growth.

On the hardware side, Meituan continues to invest in fulfillment technology, empowering offline delivery with AI. It has increased investments in drones and robots. By the end of 2025, Meituan’s drones had opened 70 routes in multiple cities domestically and internationally, completing over 780k orders. Recently, in Tingkou Village, Hong Kong, a dedicated drone route for elderly meal delivery was launched, reducing a 1.5-hour cross-sea mountain journey to just 10 minutes; in Guangzhou, Shenzhen, Shanghai, Suzhou, and other cities, low-altitude medical delivery routes are operational, efficiently transporting test samples and emergency supplies.

Overall, Meituan has built a deep AI moat around its local life services. As Wang Xing stated during the earnings call, the company will continue to deepen the integration of “XiaoTuan” with the Meituan app, aiming to upgrade it into an “AI-powered App,” becoming the future super AI portal for local life needs. In this AI wave, Meituan is not absent but one of the most hardcore deep participants.

Entering a New Narrative

Overall, under the extreme pressure of the 2025 takeout war, Meituan not only firmly held its core business but also propelled its new business into the “trillion-yuan club,” with “Everything to Home” and overseas expansion progressing simultaneously.

Looking into 2026 and beyond, the company’s investment and valuation logic is expected to shift:

First, the market has fully priced in negative expectations for the takeout war. With clear regulatory signals and stabilized financial data, the intensity of industry competition is no longer the primary obstacle to valuation. According to guidance from the company’s conference call, the average order loss in food delivery in Q1 2026 is expected to continue narrowing, further confirming that the old performance burdens are gradually being lifted.

As these old constraints are lifted, the market will naturally shift its focus to new variables that determine the company’s long-term value—namely, the industry model reshaping opportunities brought by AI technology. As Meituan’s AI assistants become more deeply embedded in app consumption scenarios, the valuation system is likely to shift from focusing on short-term operational performance of core local commerce to assessing the match between AI and real-world consumption and its long-term commercialization potential.

*Disclaimer: