New Competition Could Have Long-Term Implications and Headwinds for Meituan

We see some near-term headwinds for no-moat Meituan as its food delivery business, which accounted for 55% of 2021 revenue and remains the immediate revenue driver, sees continued pressure in 2022. The company cited impact from COVID-19 lockdown policies but also indicated there is some limited visibility due to the macroeconomic slowdown. We also expect customer acquisition to slow, given that there are 693 million users on the platform already and the firm only gained 3 million in the first quarter of 2022.