Assessment of the Impact of Antitrust Investigation in the Food Delivery Industry on JD and Meituan's Competitive Landscape and Valuation

Based on the above data and in-depth analysis, I will provide you with an

According to information released by the Office of the State Council’s Antitrust and Anti-Unfair Competition Commission on January 9, 2026, the agency officially launched an investigation and assessment of market competition in the food delivery platform service industry in accordance with the Anti-Monopoly Law of the People’s Republic of China[1][2].

Regulators have pointed out that three prominent problems have emerged in the food delivery platform service industry recently[1][3]:

• Subsidy Competition
  : Platforms use high subsidies to compete for market share, leading to vicious competition in the industry
• Price Competition
  : Low-price competition squeezes merchants’ profit margins and disrupts normal market order
• Traffic Control
  : Platforms exert implicit control over merchants through algorithms and traffic allocation mechanisms

Associate Professor Ye Weiming of Peking University HSBC Business School analyzed that abnormal high subsidies have created a vicious cycle for physical catering businesses, from profit erosion to quality compromise. Merchants face a ‘prisoner’s dilemma’: if they do not participate in subsidies, their traffic will be cut off; if they participate, their gross profit will be squeezed to the critical point, and they can only maintain survival by reducing ingredient quality in the end[1][2].

Regulators will conduct on-site verification, face-to-face interviews, questionnaires and other methods to gain an in-depth understanding of platform competition behaviors, and widely solicit opinions from platform operators, new employment groups, consumers and other parties[1][3]. Hong Yong, associate researcher at the Chinese Academy of International Trade and Economic Cooperation, analyzed that the core of this investigation is not to ‘suppress platforms’, but to ‘establish rules and stabilize expectations’ for the high-quality development of the industry[2].

• Trend Judgment
  : Sideways consolidation, reference range HKD 97.09 - 102.54
• MACD Indicator
  : No crossover signal, bearish bias
• KDJ Indicator
  : K=30.6, D=48.7, in oversold territory
• Beta Coefficient
  : 0.3 (low volatility relative to the Hang Seng Index)

• Trend Judgment
  : Sideways consolidation, reference range HKD 113.23 - 115.95
• MACD Indicator
  : No crossover signal, bullish bias
• KDJ Indicator
  : K=49.8, D=51.8, in normal range
• Beta Coefficient
  : 0.42 (low volatility relative to the S&P Index)

• Affected by the recent fierce market competition, the core local business segment
  swung from profit to loss, with an operating loss of RMB 14.1B and an operating loss rate of 20.9%
  [1][2]
• This is a direct result of the 2025 food delivery war, and the subsidy war has severely eroded the platform’s profits
• Revenue growth has slowed significantly (only +2.0%), far lower than market expectations

• Food delivery GMV and order volume have achieved steady growth, and overall investment has narrowed month-on-month[2]
• Thanks to improved operational efficiency, the loss margin of the food delivery business has been controlled
• The retail main business achieved 14.9% revenue growth, providing financial support for the food delivery business

• Revenue from the instant retail business (Taobao Flash Sale and Ele.me) reached RMB 22.9B, a year-on-year increase of 60%[2]
• Adjusted EBITA fell 78% year-on-year to RMB 9.073B, mainly due to investment in instant retail
• The proportion of high average order value (AOV) orders has increased, and the average order value has increased by double digits month-on-month[2]

• Platforms will focus more on operational efficiency and service quality
• High average order value (AOV) orders will become the focus of competition (Meituan accounts for more than 2/3 of orders with an actual payment of over RMB 15, and over 70% of orders with an actual payment of over RMB 30)[2]
• Measures to protect the rights and interests of merchants and riders are expected to be strengthened

• JD Food Delivery will create a differentiated competitive path through supply chain innovation
• Meituan will consolidate its leading position with advantages in user base and delivery network
• Taobao Flash Sale will focus on high-value users and increase average order value

• Bid farewell to “involutionary” vicious competition and return to a rational development track
• Form a market order of “excellent quality for fair price, healthy competition”[1][3]
• Platforms shift from purely competing on price to competing on service and innovation

• As profitability improves, the valuation center is expected to move upward
• Investors will shift their focus from market share to profit quality
• The industry’s valuation logic will shift from “growth first” to “profit first”

• P/E: N/A (Loss-Making)
• P/S: 1.44x
• 52-Week Decline: 31.79%

• Key Observation Indicator: Whether the operating profit margin can turn positive in Q4 2025 and Q1 2026
• If the subsidy war ends and losses narrow, valuation is expected to shift from “loss-making” to “profitable”, bringing revaluation opportunities
• The current stock price has fully reflected pessimistic expectations, and downside risks are relatively limited

• P/E: 9.67x (at a historical low)
• P/S: 0.23x
• 52-Week Decline: 17.37%

• High valuation margin of safety, more defensive compared to Meituan
• Solid fundamentals of the retail business provide valuation support
• Investment in food delivery business has narrowed, and losses are controllable

• GMV growth rate of food delivery business
• Magnitude of investment narrowing
• “Anti-involution” position recognized by the market amid regulatory environment

• Q4 FY2025 Earnings Report (March 19, 2026)[0]
• Changes in operating profit margin
• Profit recovery of core local business

• GMV growth rate of food delivery business
• Magnitude of investment narrowing
• Sustainability of retail business growth

• Specific content of regulatory measures
• Policies to protect the rights and interests of merchants and riders
• Changes in industry subsidy intensity

1. Regulatory Investigation is Timely
   : The long-standing “involutionary” competition in the food delivery industry has caused multiple harms to platforms, merchants, and consumers, and regulatory intervention will help the industry return to a healthy development track.
2. Short-Term Growing Pains Inevitable
   : Subsidy convergence will lead to slowing revenue growth, but in the medium to long term, the industry’s profitability will improve.
3. Competitive Landscape Reshaping Imminent
   : The industry will shift from “competing on price” to “competing on service and efficiency”, with high average order value orders becoming the focus of competition.
4. Valuation Repair Takes Time
   : Current valuations have fully reflected pessimistic expectations, and as profitability improves, the valuation center is expected to gradually move upward.

• Short-Term
  : Maintain a hold stance and wait for regulatory measures to become clear
• Medium-Term
  : Accumulate Meituan on dips, monitoring signals of narrowing losses
• Medium-to-Long-Term
  : JD has a better risk-return ratio and can be used as a defensive allocation

[1] Securities Times - “Taobao Flash Sale, Meituan, JD: Joint Statements Released!” (https://stcn.com/article/detail/3584344.html)

[2] Sina Finance - “The ‘Unwanted but Unstoppable’ Food Delivery War Faces Major Regulation; What Will Competition Focus on in 2026?” (https://finance.sina.com.cn/roll/2026-01-09/doc-inhftipp0424283.shtml)

[3] Wall Street CN - “State Council Antitrust Commission: Food Delivery Platform Service Industry Engages in Subsidy and Price Competition” (https://wallstreetcn.com/articles/3762960)

[0] Jinling AI Financial Database (Real-Time Market Data, Financial Data, Technical Analysis)