Meituan, the Chinese food-delivery giant, is facing a battle to revive its shares. The stock has tumbled about 30% this year, and analysts at Morningstar are warning that margins are going down faster than expected.
One of the main reasons for Meituan’s share price decline is the increasing competition from ByteDance. ByteDance, the owner of TikTok, is reportedly considering expanding its food-delivery services to more Chinese cities. This would put even more pressure on Meituan’s margins.
Another factor weighing on Meituan’s shares is the ongoing regulatory crackdown in China. The government has been cracking down on the tech sector, and Meituan has been a target of this crackdown. The company has been fined for monopolistic practices, and it is facing increased scrutiny from regulators.
Meituan is facing a number of challenges, but it is not out of the game yet. The company has a strong brand and a loyal customer base. If it can weather the current storm, it could still emerge as a winner in the long run.
Here are some of the things that Meituan can do to revive its shares:
- Invest in new growth areas, such as grocery delivery and on-demand services.
- Cut costs and improve efficiency.
- Negotiate better terms with merchants and restaurants.
- Work with regulators to address their concerns.
