UBS has issued a research report indicating that MEITUAN-W (03690) is currently trading at 10 times its projected 2028 earnings, which the firm believes does not fully reflect the company's increasingly dominant market position in fast-moving consumer goods (FMCG) and on-demand retail businesses.

The bank anticipates a multi-year earnings recovery for Meituan, projecting that its core local commerce (CLC) operating profit will expand from RMB 13 billion in 2026 to RMB 55 billion by 2028, ahead of an expected intensification in competition. Consequently, UBS has raised its price target from HK$128 to HK$132 while maintaining a "Buy" rating.

UBS observes that competition in mainland China's FMCG and on-demand retail markets is nearing a turning point, shifting from subsidy-driven market share battles toward a focus on operational efficiency. The bank expects this shift to increasingly favor Meituan's deep economic moat, as evidenced by the substantial profit recovery seen in the second quarter of this year, driven by its efficient "user-delivery-merchant" flywheel model.

Meituan is also strategically and selectively reinvesting to recapture high-value customers. The firm believes that a stronger user mindshare will elevate the competitive threshold for future rivals in the industry.