Meituan warned of its biggest annual loss since at least 2021, highlighting the extent to which a brutal price war in food delivery is eroding the margins of China’s biggest internet companies, according to the Bloomberg.
The Beijing-based company expects to post a loss of between 23.3 billion yuan ($3.4 billion) and 24.3 billion yuan for 2025, according to a stock exchange filing. This represents a drastic reversal from a profit of 35.8 billion yuan in 2024. In 2021, the company recorded a loss of more than 23.5 billion yuan.
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Meituan shares fell to their lowest intraday level since March 2024 on Thursday after Moody’s Ratings revised the food delivery platform’s rating outlook to negative.
A recovery in Meituan’s food delivery business looks increasingly uncertain, Moody’s senior analyst Ying Wang said in a report yesterday.
Intense competition in the sector will likely continue to pressure margins and increase investment requirements, and this is expected to keep the company’s leverage elevated for longer than previously anticipated, Wang added.
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*With information from Dow Jones Newswires
