Meituan reported first-quarter 2026 revenue of RMB 91.04 billion, a 5.6% year-on-year increase, but shifted to a net loss of RMB 6.83 billion from a RMB 10.06 billion profit a year earlier. Operating performance deteriorated sharply, with an operating loss of RMB 6.47 billion versus a RMB 10.57 billion profit in Q1 2025, pulling the operating margin down to –7.1% from 12.3%.
Gross profit fell 19.0% to RMB 25.97 billion as the gross margin contracted to 28.5% (Q1 2025: 37.2%). Cost of revenues jumped 20.2% to RMB 65.07 billion, representing 71.5% of sales, up 8.7 percentage points year on year, driven by higher courier incentives and the expansion of grocery retail and overseas businesses. Selling and marketing expenses surged 51.1% to RMB 22.97 billion, lifting their share of revenue to 25.2% (Q1 2025: 17.6%). Research & development spending rose 22.0% to RMB 7.04 billion, largely due to increased AI investment, while general and administrative costs grew 11.9% to RMB 2.94 billion.
The Core Local Commerce segment recorded marginal revenue growth of 0.1% to RMB 64.06 billion but swung from a RMB 13.49 billion profit to a RMB 2.03 billion loss, reflecting heavier subsidies and marketing outlays. New Initiatives revenue advanced 21.3% to RMB 26.98 billion; segment operating loss narrowed to RMB 2.12 billion, improving the margin to –7.8% from –10.2%.
Non-IFRS metrics also weakened. Adjusted EBITDA fell from a RMB 12.30 billion profit to a RMB 3.05 billion loss, while adjusted net profit turned to a RMB 4.97 billion loss from a RMB 10.95 billion profit a year earlier.
Liquidity remained solid with cash and cash equivalents of RMB 117.03 billion and short-term treasury investments of RMB 63.34 billion at end-March 2026. Newly raised bank borrowings contributed to net financing inflows of RMB 24.79 billion, lifting the gearing ratio to 71%.
Other gains declined after a RMB 745.70 million fine imposed by the State Administration for Market Regulation over merchant qualification compliance, contributing to a fall in net other gains to RMB 598.70 million from RMB 1.42 billion.
Management reiterated its intention to prioritise “high-quality growth” through disciplined investment, further AI integration and continued enhancement of supply-chain capabilities across both Core Local Commerce and New Initiatives for the remainder of 2026.
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