Moody's revises Meituan view to positive

Moody's Ratings said it changed the outlook on Meituan's ratings to positive from stable and affirmed Meituan's Baa3 issuer rating and senior unsecured ratings.

"The positive outlook reflects Meituan's faster-than-expected deleveraging trend, supported by an enhanced market position in its core food delivery and in-store, hotel and travel service operations, as well as an extended track record of disciplined growth, " said Ying Wang, a Moody's vice president and senior analyst, in a press release.

Moody's said it estimates Meituan's adjusted EBITDA margin will gradually increase to 10% over the next 12-18 months. The company’s adjusted EBITDA margin rose to 7% in 2023, slightly higher than the agency's previous forecast of around 6% for the same year.

The agency said it also forecasts the company's leverage, as measured by the adjusted debt/EBITDA ratio, will decrease to 1.6x-1.8x over the next 12-18 months, compared with 3x in 2023.

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