Is Li Auto "Caught in the Crossfire" of the Battle between Alibaba and Meituan?

Author | Fan Liang

Editor | Zhang Fan

At the end of August, as the financial reports of Meituan, Alibaba, and JD.com were successively released, the market's focus on the food delivery war has shifted from the primary competition of subsidies and order volume to a comprehensive test of the companies' long - term strategic determination and financial strength.

From the perspective of free cash flow, Alibaba has been continuously investing a large amount of capital in high - tech fields such as cloud services. As a result, its free cash flow in Q2 of 2025 has shown a significant net outflow. On the Meituan side, as the food delivery business enters the traditional peak season in Q3 of 2025, the increase in order volume may lead to a further increase in subsidy amounts. It is highly likely that Meituan's free cash flow will also turn into a net outflow.

In contrast, Alibaba has recently taken measures to sell assets to raise funds. So, will Meituan take corresponding measures?

Meituan's Funds: Sufficient in the Short Term

As of the first half of 2025, Meituan had a total of 101.7 billion yuan in cash and cash equivalents on its books, 17.9 billion yuan in restricted cash, and 69.4 billion yuan in short - term wealth management investments. The total of these three items is approximately 189 billion yuan, indicating that Meituan has sufficient liquidity reserves on the asset side.

Further conduct an extreme stress test on Meituan's fund solvency: Assume that Meituan needs to use its monetary assets (including cash, short - term wealth management investments, and accounts receivable) to repay its short - term debts (including various payables, borrowings, and notes payable). In this extreme scenario, Meituan's total monetary funds are approximately 192.1 billion yuan. After repaying approximately 93.5 billion yuan of major short - term debts, it can still maintain a cash reserve of approximately 98.6 billion yuan, and its financial safety cushion is still relatively thick.

Looking at the future changes in funds at the operational level, according to CICC's forecast, Meituan's EBITDA for the whole year of 2025 is expected to be - 4.5 billion yuan. Considering that its EBITDA in the first half of 2025 was approximately 13 billion yuan, by calculating the difference, Meituan's EBITDA in the second half of 2025 may be - 17.5 billion yuan. Since EBITDA excludes the impact of depreciation and amortization to a certain extent, its data is often close to the net cash flow from operating activities. If the impact of capital expenditures is further considered, Meituan's free cash flow outflow in the second half of 2025 is expected to exceed 20 billion yuan.

This scale of free cash flow outflow is not much compared to Meituan's 98.6 billion yuan of funds under the extreme test. Therefore, if the subsidy expenditures for the food delivery and flash purchase businesses end in 2025, even though the cash outflow scale is large during the traditional peak season, Meituan has sufficient "ammunition" to cope.

However, if it faces a long - term war, the situation will be different.

It is worth noting that Taobao Flash Purchase clearly stated in July 2025 that it would invest 50 billion yuan in subsidies in the next 12 months. Although not all of this 50 billion yuan in subsidies may be used for the food delivery business, even if it is mainly invested in the instant retail field such as flash purchase, it will still compete with Meituan's core business. Assuming that the intensity of market competition in 2026 is similar to that in 2025, Meituan may continue to face a cash outflow of 10 - 20 billion yuan. In this scenario, Meituan's cash reserve under the extreme test will decline from 98.6 billion yuan in the first half of 2025 to approximately 50 - 70 billion yuan.

Although this remaining amount of funds is still quite large, it has decreased significantly compared to the peak reserve. From the perspective of financial stability, if Meituan wants to maintain its cash reserve at a stable level, it needs to raise funds externally or adjust its asset structure to cope.

Signs of Optimizing Asset Structure

Previously, the analysis of Meituan's cash reserve focused on current assets and current liabilities. However, among non - current assets, Meituan also has considerable "hidden funds". If this factor is taken into account, the company actually has sufficient subsidy funds to cope with industry competition.

According to the financial report data, as of the first half of 2025, the total scale of Meituan's long - term investments reached 43.4 billion yuan, which is specifically composed of three parts: Other financial investments (measured at fair value with changes recognized in profit or loss or other comprehensive income) of 22.8 billion yuan, Investments accounted for using the equity method of 19.5 billion yuan, and Long - term wealth management investments of 1.1 billion yuan. In contrast, at the end of 2024, the total amount of Meituan's long - term investments was 48.8 billion yuan, including 21.5 billion yuan in other financial investments, 19.8 billion yuan in investments accounted for using the equity method, and 7.5 billion yuan in long - term wealth management investments.

Figure: Meituan's Asset Situation   Source: Company announcements, compiled by 36Kr

Judging from the underlying asset composition of these long - term investments, equity investments dominate. According to Meituan's 2024 financial report, its investment targets mainly cover four categories: first, chain hotels that can increase the platform's supply; second, merchant empowerment solutions (such as payment systems and supply chain management systems) that help improve the overall efficiency of the industry; third, mobile technologies that can achieve efficient synergy with the platform in the future; fourth, cutting - edge technologies such as artificial intelligence, semiconductors, and robots. Among these investments, the fair value of the equity of listed companies held by Meituan totaled approximately 27.2 billion yuan at the end of 2024.

If compared with 2024, Meituan has shown a strategy of actively optimizing its asset allocation. In the first half of 2025, Meituan's long - term wealth management investments decreased by 6.4 billion yuan. Meanwhile, Meituan's short - term wealth management investments also decreased by 2.8 billion yuan. This indicates that Meituan has taken action to increase the company's cash reserve by disposing of some wealth management investments.

So, will Meituan adopt a strategy similar to Alibaba's to shrink its business? In June 2025, Meituan suddenly announced the closure of its preferred business in some regions, which is actually a move to shrink its business. But apart from the preferred business, Meituan's other new businesses, such as its overseas business, are booming, and there is no basis for further business shrinkage.

Therefore, releasing the value of some long - term investments to further support the development of the core business is a logical strategic option for Meituan. From the perspective of the difficulty of asset disposal, the liquidity of listed company stocks is far greater than that of non - listed companies. If Meituan needs to raise funds by selling equity in the future, it will probably first consider the more liquid listed company stocks.

Will Li Auto Be "Involved"?

Public information shows that the stocks held by Meituan mainly include the following companies:

1. Li Auto

As of the end of 2020, Meituan held 258 million shares of Li Auto, with a shareholding ratio of 14.27%. This investment was classified as an investment accounted for using the equity method in the financial statements, and the book value at that time was approximately 10.4 billion yuan. Later, due to reasons such as Li Auto's additional share issuance, Meituan's shareholding ratio was passively diluted, but it did not actively reduce its holdings during this period. As of the first half of 2025, according to Wind data, its shareholding ratio dropped to 12.06%.

Under the equity - method accounting model, the fluctuation of Li Auto's stock price does not directly affect the book value of this investment. Meituan mainly adjusts its book value based on the US dollar exchange rate and the changes in Li Auto's net profit. After adjustment, the book value of Meituan's equity in Li Auto is approximately 14 billion yuan, and based on Li Auto's market value, its fair value is as high as approximately 22 billion yuan, which means there is a floating profit of approximately 8 billion yuan. Looking back at the data disclosed by Meituan at the end of 2024, the total fair value of its investments in listed entities was approximately 27.2 billion yuan, indicating that Li Auto accounts for the majority of it.

2. Maoyan Entertainment

As of the first half of 2025, Meituan held a total of 7.18% of Maoyan Entertainment's shares, and the number of shares held has not changed since 2019. In terms of the accounting method, considering that Maoyan Entertainment was initially incubated within Meituan and Meituan still holds a seat on Maoyan's board of directors, this investment is also accounted for using the equity method, and its fair value is approximately 640 million yuan.

In addition, according to market news, Meituan also made external investments in companies such as Shuidi, Hesai Technology, and Kuaishou in the early stage. Subsequently, these companies successfully went public. Although Meituan does not appear among the major shareholders with a shareholding of more than 5% in these companies, Meituan may still hold a small amount of equity in these companies.

Among the two major assets currently held, Maoyan Entertainment, as an important entry point for Meituan's movie and entertainment business, has a close strategic relationship with the group, and it is almost impossible for Meituan to reduce its holdings. In this case, the equity of Li Auto, which has relatively weak business relevance but a large holding amount, becomes the most likely option.

In fact, in addition to the company - level investment, Wang Xing, the founder of Meituan, also personally invested in Li Auto. At the end of 2020, Wang Xing personally held approximately 133 million shares of Li Auto, accounting for 7.36%, and the combined shareholding ratio with Meituan was as high as 21.63%. Although Meituan at the company level has remained inactive in recent years, Wang Xing has begun to gradually reduce his holdings. As of the first half of 2025, according to Wind data, the number of shares held by Wang Xing through Zijin Global has decreased by approximately 23 million shares compared to 2020, to 110 million shares, with a shareholding ratio of 5.13%.

In summary, if "raising funds" becomes an important strategic direction for Meituan in the future, then reducing the equity of Li Auto is undoubtedly a key and effective choice, which also echoes Alibaba's strategic move to sell the equity assets of listed companies. In addition, considering that this investment has brought a floating profit of approximately 8 billion yuan, once sold, it will not only provide sufficient cash flow but also significantly increase the company's net profit.

For Li Auto, this may be an "involvement" because it is not due to its own poor performance or limited development prospects, but rather Meituan's need for strategic adjustment and fund - raising. As an important shareholder of Li Auto, Meituan's share - reducing behavior will undoubtedly bring short - term pressure to Li Auto's stock price. Even if Meituan has not taken any substantial action to reduce its holdings of Li Auto's stocks at present, this potential possibility will still put some pressure on Li Auto's stock price. However, if Li Auto's fundamentals are strong enough, its product competitiveness is outstanding, and its sales volume continues to grow, then the short - term impact caused by this "involvement" will be limited. In the long run, the company's intrinsic value will ultimately be reflected in the stock price.

Of course, a major premise for the above situation to occur is that the high - intensity subsidies for food delivery and instant retail will continue for more than a year. Since 2025, the State Administration for Market Regulation has conducted multiple rounds of interviews with major food delivery platforms. If the market competition situation is effectively alleviated in the future, then Meituan will naturally not have the problem of capital pressure.

*Disclaimer:

The content of this article only represents the author's views.

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