Citi has raised its price target for Meituan-W (03690) to HK$120 from HK$113, following the company's second-quarter results that exceeded expectations. The firm has also increased its revenue forecasts for Meituan for the 2026 to 2028 period by 3.4% to 5.6%, with adjusted net profit projections of RMB 2.4 billion, RMB 20 billion, and RMB 31.6 billion for those respective years.

Meituan reported a 14.4% year-on-year increase in total revenue for the second quarter, surpassing both Citi's and the market's estimates by 2.9% and 3.5%, respectively. Core local commerce operating profit improved significantly to RMB 5.67 billion during the quarter, well above the firm's and the market's projections of RMB 3.22 billion and RMB 3.42 billion.

Management expects the unit economics (UE) per order for its food delivery business to remain positive in the third quarter. Citi currently forecasts a per-order profit of RMB 0.08 for food delivery in Q3. In terms of Keeta, the Saudi Arabia operations achieved positive unit economics in July this year, just 22 months after entering the market.

The firm projects Meituan's third-quarter total revenue to grow 20% year-on-year, with core local commerce and new business revenue expected to rise 15.3% and 31.5%, respectively. Core local commerce operating profit is estimated at RMB 4.15 billion, while adjusted operating profit and adjusted net profit are anticipated at RMB 2.43 billion and RMB 2.56 billion, respectively.