Meituan’s Overseas Push Steadies Investors Despite Second Consecutive Loss

Why It Matters

Investors are tolerating the losses because Meituan’s overseas push and AI‑driven efficiency gains promise a path to sustainable profitability and diversification beyond China’s price‑war‑ridden food‑delivery market.

Key Takeaways

• Full-year revenue hit $53.3 bn, up 8% YoY
• Q4 adjusted net loss $2.2 bn, versus $1.4 bn profit last year
• International segment “new initiatives” revenue $15.2 bn, up 19%
• AI R&D spending rose 23% to $3.8 bn in 2025
• Keeta targets Saudi Arabia profitability by end‑2026

Pulse Analysis

Meituan’s 2025 earnings underscore the tension between scale and profitability in China’s hyper‑competitive local‑services arena. While revenue grew to $53.3 bn, the company posted a $3.4 bn net loss as aggressive price cuts in food delivery eroded margins. Investors, however, focused on the firm’s broader ecosystem strategy, noting that the "new initiatives" segment—anchored by overseas grocery and delivery ventures—contributed $15.2 bn, a 19% jump that signals a deliberate shift toward higher‑margin markets outside mainland China. This diversification is critical as domestic growth slows and rivals intensify price wars.

The overseas expansion centers on the Keeta brand, which now operates across the Gulf, Brazil and Hong Kong. Management highlighted that Keeta achieved profitability in Hong Kong after 29 months and expects Saudi Arabia to turn positive by the end of 2026, leveraging favorable market dynamics and reduced subsidy reliance. In Brazil, the focus on São Paulo’s southern districts aims to build a differentiated service footprint. By expanding into regions with less entrenched competition, Meituan hopes to capture new order volume while improving unit economics, a narrative that has steadied its Hong Kong‑listed shares around $11.2 per share.

Parallel to geographic growth, Meituan is betting on artificial intelligence to lift operational efficiency and user experience. R&D outlays rose 23% to $3.8 bn, funding the LongCat foundation model and the Xiaotuan AI assistant that now handles complex multi‑criteria requests within the app. By integrating real‑world data—maps, reviews, inventory—Xiaotuan can streamline merchant matching and delivery routing, potentially reducing per‑order losses. Industry analysts view this AI push as a differentiator that could transform Meituan’s core services, offsetting margin pressure and positioning the firm as a leading AI‑enabled platform in the broader on‑demand economy.