S&P Global Ratings upgraded Meituan's (HKG:3690) issuer credit rating to A- from BBB+, citing the company's dominant position in China's food delivery market and strong performance amid a soft economy.

The on-demand delivery service provider's robust growth in transaction volume and earnings, along with effective strategies to fend off competitors, underpins the upgrade, the rating agency said in a Thursday release.

The company's solid business execution will anchor a stronger credit profile despite increased costs from overseas expansion and enhanced rider benefits, S&P said.

The company's strategic use of its food delivery edge to boost its in-store business and trump competition from rivals like Douyin has also proven effective, the rating agency said.

S&P expects Meituan to maintain revenue growth of between 12% and 18% and EBITDA expansion of between 8% and 12% over the next two years, supporting its stable outlook.

Despite new market entrants like JD.com, Meituan's established scale and market penetration should mitigate a bigger impact, S&P said.