What happened
Meituan swung back to profitability in the June quarter, reporting an adjusted net profit of 2.5 billion yuan (US$372 million) and snapping a three-quarter losing streak, according to its earnings report on Friday.
The result beat the average analyst forecast of 340 million yuan compiled by Bloomberg, helped by a cooling price war in China's food-delivery market that allowed the company to scale back subsidies and focus on higher-value customers.
Revenue rose during the quarter, though the company did not provide full figures in the summary.
Why it matters
The turnaround suggests Meituan can protect margins when competitive pressure eases, but its ability to sustain profitability remains tied to how it navigates the looming threat from rival Douyin.
With Douyin expanding into local services, any renewed subsidy battle could erode the gains Meituan has just made, making this quarter's profit a potential high-water mark rather than a new baseline.
Key facts
Meituan swung back to profitability in the second quarter.
Adjusted net profit was 2.5 billion yuan (US$372 million) for the June quarter.
The company ended a three-quarter losing streak.
The result beat the average analyst forecast of 340 million yuan compiled by Bloomberg.
China's food-delivery price war cooled, allowing Meituan to reduce subsidies and target higher-value customers.
What to watch next
Whether Meituan can maintain its profit momentum if Douyin's competitive push forces it to reintroduce heavier subsidies.
Investors will likely watch for signs of a renewed price war and how the company balances customer growth with profitability.