Deliveroo ‘underappreciated’ after Hong Kong exit
London broker Panmure Liberum has described takeaway giant Deliveroo as “underappreciated” after its Hong Kong exit.
It added that concerns the company could be pushed out of other international markets by better-funded competitors were “noise”.
Deliveroo announced its exit from the Hong Kong market this morning, selling some assets to Foodpanda and closing other assets.
The London-listed delivery service said it “would not serve shareholders’ best interests” to continue to operate in Hong Kong.
“Both earnings before interest, tax, depreciation and amortisation (EBITDA) and group GTV growth [revenue] are set to benefit from this market exit,” Panmure Liberum analysts said.
“[We think] Deliveroo can generate a level of cash flow over the long-term that is currently underappreciated by the market,” Panmure added.
Analysts noted that the exit “feeds the long-term bear thesis that Deliveroo could be pushed out of some of its smaller markets by bigger better-funded competitors”, but said fears were “noise around the investment case.”
Keeta is a China-based on-demand delivery giant with an aggressive, price-slashing strategy.
It launched in Hong Kong in May 2023 and had the largest order volume in the market by May last year. According to Measurable AI, its market share had grown to 55.2 per cent by January 2025.
“With Hong Kong one of the most discount sensitive markets in Deliveroo’s portfolio, it’s clear that Meituan’s Keeta has been able to muscle it out of the market through discount spend,” analysts added.
In 2024, Hong Kong represented five per cent of Deliveroo’s revenue and had a five percentage point negative impact on international revenue growth.
Its share price rose just under two per cent in early trades on March 10.