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Bond Market News
Meituan Downgraded to BBB+ by S&P
March 5, 2026
Meituan was downgraded by a notch to BBB+ from A- by S&P. The downgrade reflects the company’s weakened competitive position driven by intensifying competition from Alibaba in China’s on-demand delivery market. Meituan’s market share in on-demand delivery has declined from ~70% at end-2024 to just above 50% by end-2025, while Alibaba’s surged from ~20% to near 40%. S&P views this shift as structural rather than temporary and consequently sharply revised down its EBITDA forecast for Meituan in 2026 to 20-30% of the 2024 peak level, compared to a prior estimate of 70%. However, Meituan still retains competitive strengths by leading in high-value orders, maintaining strong consumer mindshare regarding speed and service quality, deep merchant networks. The company is also said to be exercising financial discipline, having shut down its community group-buying business, reducing share buybacks, and scaling back its Brazil expansion plans. Financially, Meituan is considered to be well-capitalized, with unrestricted cash and short-term investments of ~RMB 141bn ($20.4bn) as of end-September 2025, comfortably covering near-term debt maturities of RMB 16.3bn ($2.4bn). S&P projects free operating cash flow to recover to RMB 6-26bn ($0.9-3.8bn) annually in 2026-27, after turning negative in 2025, and expects the company to maintain its sizeable net cash position going forward. The negative outlook reflects the risk that profitability could deteriorate further if the ongoing subsidy war re-escalates over the next 12 to 24 months.
Its dollar bonds traded stable, with its 4.5% 2031s at 99.1, yielding 4.7%
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