Moody's Ratings has confirmed Meituan's Baa1 issuer and senior unsecured ratings, while changing the outlook to negative from stable. The move centers on doubts about how quickly Meituan's food delivery business can rebound given intensifying competitive pressures.
In announcing the change, Ying Wang, Vice President and Senior Analyst at Moody's Ratings, said: "The negative outlook reflects the rising uncertainty on the recovery of Meituan's food delivery business due to intense competition." Wang added that "ongoing margin pressure and heightened investment requirements are likely to keep the company's leverage elevated for longer than previously anticipated."
Moody's balanced the outlook revision with recognition of Meituan's financial discipline. The agency pointed to the company's solid net cash position and an investment approach that adapts to limit losses in emerging business lines. Moody's also expects the company's core instore, hotel and travel services segment to perform steadily going forward.
Meituan recorded total revenue of RMB362 billion for the twelve months ending September 2025, a 12% increase versus the prior period. That pace marks a slowdown from the more than 20% annual growth the company delivered in each of the previous two years. Moody's attributed the deceleration largely to fiercer competition in the food delivery market beginning in the second quarter of 2025.
The company's adjusted EBITDA margin for the same twelve-month period dipped to 2%, compared with 13% in 2024. Moody's said the decline was driven mainly by greater consumer subsidies and promotional spending. Those actions contributed to the food delivery business reporting a segment loss starting in the second quarter of 2025.
Meituan's strategic responses to competitive pressure include recent dealmaking. The company's acquisition of Dingdong (Cayman) Limited for $717 million is cited by Moody's as evidence of efforts to shore up its position in the instant retail value chain. At the same time, Moody's noted that such moves point to rising capital investment requirements as Meituan defends market share.
Looking ahead, Moody's expects Meituan's consolidated adjusted EBITDA margin to recover gradually to a range of 5% to 6% over the next 12-18 months. That forecast is conditional on continued stable profitability in the instore, hotel and travel segments and disciplined spending in new business initiatives.
On the balance-sheet front, Meituan's total adjusted debt stood at RMB51 billion as of September 2025, down from RMB62 billion at the beginning of 2025. Moody's projects the debt balance could climb back above RMB60 billion over the coming 12-18 months. The agency attributes that projected increase to refinancing activity completed in the fourth quarter of 2025 and the firm's need to maintain a substantial cash buffer.
Moody's baseline expectation shows Meituan's leverage improving to 3.4x by the end of 2026 and further to 2.4x in 2027, assuming recovery from the expected EBITDA loss in 2025.
The company's liquidity profile remains strong. As of September 2025, Meituan held RMB141 billion in cash and short-term investments, which Moody's said more than covers short-term debt of RMB19 billion, as well as planned capital expenditures and anticipated share repurchases over the next 12 months.
Moody's decision preserves the company's investment-grade Baa1 rating while signaling that the outlook could be downgraded if the food delivery segment's recovery weakens further, margins do not stabilize, or investment demands outpace management's plans to limit losses in new ventures.
For market participants, the announcement highlights competing dynamics: robust liquidity and disciplined financial management on one hand, and near-term operating and investment pressures tied to a highly contested food-delivery market on the other.