BOC International has revised its assessment of MEITUAN-W (HKEX: 03690), upgrading the stock's rating from "Hold" to "Buy". The firm's target price for the shares has also been increased from HK$100 to HK$110, based on a sum-of-the-parts valuation methodology.

The bank's report notes that Meituan's first-quarter total revenue reached 91 billion yuan, representing a 6% year-on-year increase, which aligned with market expectations. The improvement in the unit economics of its food delivery business surpassed expectations, and this positive trend is anticipated to persist in the coming months. This is expected to drive the company's core local commerce segment to achieve an operating profit of 3.6 billion yuan in the second quarter.

Key Competitive Strengths

While near-term competitive dynamics remain uncertain, the analysis highlights Meituan's solid foundational advantages. These include its robust supply chain, fulfillment capabilities, and operational efficiency. The company's diverse instant delivery models and cross-selling strategies are seen as enabling a better balance between market share growth and unit economics performance.

Future Growth Drivers

Furthermore, the accelerating integration of artificial intelligence into its core operations is projected to unlock significant long-term efficiency gains. BOC International forecasts that Meituan's second-quarter revenue growth will accelerate to 11% year-on-year, reaching approximately 102.1 billion yuan. Within this total, revenue from core local commerce and new initiatives is expected to grow by 6% and 23%, respectively.