Citi has released a research report maintaining a "Buy" rating on Meituan-W (03690) with a target price of HK$120. The firm remains confident in management's steady execution, focus on high-quality growth, and AI-driven expansion, believing the company is well-positioned to navigate persistent macroeconomic and competitive headwinds.

Management noted that after regulators issued guidance on subsidy practices, competition in food delivery eased further in the third quarter. The industry has shifted its focus toward improving operational efficiency, which is expected to lay a stronger foundation for earnings recovery across the sector. Meituan's subsidy levels remained broadly flat quarter-over-quarter. Despite rising rider costs and the implementation of work-related injury insurance, unit economics are still projected to stay positive in the third quarter.

In the instant retail segment, gross merchandise value within core local commerce grew 79% year-over-year, largely driven by the first-party instant retail business. New initiatives saw merchandise sales rise 45% year-over-year, supported by the expansion of Xiaoxiang Supermarket and Happy Monkey stores. On the international front, Keeta has achieved profitability in Hong Kong, while its Saudi Arabia operations turned profitable in July. In Brazil, the focus remains on budget discipline and improving operational efficiency in São Paulo. Management emphasized that the domestic Chinese market continues to be the company's primary priority compared to overseas operations.