Fitch Downgrades Meituan to ‘BBB-‘ from ‘BBB’; Outlook Remains Negative
Fitch Ratings has downgraded Chinese e-commerce platform Meituan's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BBB-' from 'BBB'. The Outlook remains Negative. Fitch has also downgraded Meituan's senior unsecured rating and ratings on its bonds to 'BBB-' from 'BBB'.
The downgrade reflects the greater regulatory uncertainty facing Meituan, which increases volatility in its profitability and investments. Fitch expects regulations enforcing delivery-rider benefits to pressure the operational efficiency and margin of Meituan's food-delivery operation. In addition, the company's new initiatives could evolve based on market opportunities and regulations, which reduces visibility on execution and the investment amount. As a result, we expect visibility on cash flow generation to...