Morgan Stanley has reaffirmed its "Overweight" stance on Meituan-W (03690), setting a price target of HK$110. The brokerage views the recent share price pullback as an attractive entry opportunity, noting that the correction now reflects a more realistic recovery trajectory for food delivery unit economics.

The bank believes the market is still underestimating the long-term growth potential of Meituan's other in-store services, which could unlock additional upside. Morgan Stanley projects that by 2030, Meituan's online in-store services gross transaction value (GTV) will reach 2.8 trillion yuan, representing an 18% compound annual growth rate (CAGR) from 2025 to 2030. Within this, other in-store services GTV is expected to hit 1.9 trillion yuan at a 25% CAGR, while food and beverage GTV is forecast to reach approximately 1 trillion yuan, growing at 8%.

Morgan Stanley pointed out that earlier market expectations assumed an overly optimistic linear recovery in food delivery unit economics and a normalization of in-store competition. However, the recent share price correction now reflects a more rational recovery path. The firm expects Meituan to maintain its market share in other in-store services, establishing a 2:1 structural ratio against Douyin, while securing a 60% share in the food and beverage segment.

The bank maintains its forecast that Meituan's food delivery unit economics will recover to 1 yuan per order by 2027, a projection it believes the market has largely priced in. Morgan Stanley reiterates that the long-term growth potential of other in-store services remains undervalued by the market, providing further upside for the stock.