[ET Net News Agency, 19 October 2020] S&P Global Ratings today assigned its 'BBB-'
long-term issuer credit rating to Meituan Dianping (03690) and its 'BBB-' long-term issue
rating to the company's senior unsecured notes.
It said Meituan has a dominant market position in China's online shopping platform,
connecting users with a wide range of services such as food delivery, in-store, hotel, and
travel booking. The company generates high traffic and promotes cross-selling. These
strengths are partially tempered by intense competition and its relatively short record of
free operating cash flow.
S&P expects Meituan to be in a net cash position in the next two years, given its ample
cash, cash equivalent, and short-term investment balances. This is despite sizable capital
expenditure (capex) needs for its new initiatives.
The stable outlook reflects the agency's expectation that Meituan will expand its EBITDA
and its ability to generate strong positive free operating cash flow over the next 12-18
months. (KL)