Fitch revises Meituan view to negative

Fitch Ratings said it revised the outlook on Meituan to negative from stable and affirmed the long-term issuer default rating at BBB.

Meituan's senior unsecured rating and the rating on its outstanding bonds have also been affirmed at BBB.

The outlook revision reflects greater uncertainty in cash generation following the company's higher-than-expected investments, mainly in Meituan Select, in a bid to enter and expand in the consumer retail market, Fitch said.

“Fitch expects negative free cash flow (FCF) to widen in 2021 as a result of weaker profitability and the high capex, which will more than offset profit growth in the more mature food delivery and in-store, hotel and travel segments,” Fitch said in a news release.

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