Meituan: A Messy Quarter, But Underlying Trends Are Positive

Eleceed Capital675 FollowersFollow5ShareSavePlay(10min)CommentsSummaryMeituan remains a buy as the business fundamentals outshine the Q4 headline loss, with improved user quality and a strengthening moat.Core Local Commerce faces pressure, but food delivery competition is rationalizing, and sequential margin recovery is underway as management pulls back from low-quality orders.MPNGF's upgraded membership program is driving higher user engagement, retention, and ARPU, expanding the high-value member base and reducing churn risk.Valuation at ~8.7x two-year forward EBITDA appears unjustified given robust adj. EBITDA growth outlook and easing competitive headwinds.winhorse/iStock Unreleased via Getty Images Summary I upgraded Meituan (MPNGF)(MPNGY) to a buy rating in my previous update, as I believed the revenue weakness was not as bad as it seemed. I also thought the other new initiativesThis article was written byEleceed Capital675 FollowersFollowI'm a passionate investor with a strong foundation in fundamental analysis and a keen eye for identifying undervalued companies with long-term growth potential. My investment approach is a blend of value investing principles and a focus on long-term growth. I believe in buying quality companies at a discount to their intrinsic value and holding them for the long haul, allowing them to compound their earnings and shareholder returns.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.