(Bloomberg) — Growth for China’s food delivery giant Meituan has peaked as competition heats up in the $145 billion industry, said a China tech analyst, who is the lone bear on the Hong Kong-listed stock.

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“Other players will start to take shares from Meituan especially when there’s a lack of growth anywhere in the industry,” Barclays Plc’s Jiong Shao, the only analyst who has a sell call on the stock according to Bloomberg data, said in an interview with Bloomberg last week.

China’s food delivery market — the world’s biggest — had feasted on surging demand for takeouts during Covid lockdowns, but Shao sees limited growth potential now that the country has reopened. Competition is also heating up as other tech firms including ByteDance Ltd. expand efforts into the delivery space.

The company missed out on a sizzling rally in China tech after the nation dropped restrictions and eased its regulatory stance toward internet giants. Meituan’s shares have slumped 17% this year and is the worst performer on the Hang Seng Tech Index.

Shao has kept his contrarian underweight rating on Meituan ever since he initiated coverage in November 2021. The call returned 23% over the past year, beating every other analyst.

Shao said Meituan will continue to “underperform its peers” as the lifting of health restrictions dampens demand for food delivery companies, if global experiences are any guide. A world-beating rally in Europe’s food delivery firms quickly reversed last year as deepening losses and rising costs deterred investors.

Another factor weighing on the stock is major stakeholder Tencent Holdings Ltd.’s divestment of Meituan’s shares as part of an effort to comply with Beijing’s anti-monopoly campaign. Among those who will receive the shares, Prosus NV has already announced it will sell them.

To be sure, Meituan’s earnings are looking up. It swung to a quarterly profit in the third quarter last year after almost two years in the red and Shao will be awaiting upcoming results for clues on its fundamentals.

“I’m somewhat skeptical about the true fundamental values they create and bring to the table,” Shao said. “Sure they bring some, but do they bring the values that are worth hundreds of billions of dollars in market cap? I obviously doubt that.”

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