China food delivery firm Meituan beats revenue expectations amid economic headwinds By Reuters

© Reuters. A Meituan supply employee rides a scooter carrying greens on a snowy day in Beijing, China January 19, 2021. REUTERS/Tingshu Wang/File Picture

By Casey Corridor

SHANGHAI (Reuters) -China’s Meituan posted a bigger-than-expected 22.1% rise in third-quarter income on Tuesday, because the nation’s largest meals supply agency prolonged its restoration from the pandemic influence of final yr.

The platform, whose app offers providers reminiscent of bike-sharing, ticket-booking and maps, reported June-September income of 76.47 billion yuan ($10.69 billion), versus 62.62 billion yuan in the identical interval a yr earlier.

The outcome in contrast with the 75.59 billion common of 15 analyst estimates compiled by LSEG.

Meituan posted a revenue of three.59 billion yuan versus revenue of 1.22 billion yuan a yr earlier.

Final yr’s third-quarter earnings have been affected by COVID-19 containment measures, which included restrictions on motion in main cities that curtailed supply providers.

Demand stays lacklustre, with China’s post-pandemic financial restoration shedding steam in latest months. Meituan CEO Wang Xing beforehand flagged a more durable third quarter for the meals supply enterprise as a result of macroeconomic headwinds.

Quarterly income from core native commerce, which incorporates meals supply in addition to non-food supply service Meituan Instashopping, rose 24.5% to 57.69 billion yuan.

Income from in-store, resort reserving, and journey sector companies benefited from a home journey rebound over the summer season with transaction quantity rising 90% year-on-year.

Meituan competes at house with long-time rival Ele.me, owned by Alibaba (NYSE:) Group, in addition to ByteDance, the proprietor of TikTok and Chinese language sister platform Douyin, which branched out into meals supply in February.

It stays China’s largest supply platform, with a 69% share of the 1 trillion yuan market, confirmed information from researcher ChinaIRN.

In Could, it expanded past mainland China to Hong Kong with new meals supply enterprise KeeTa, and is reportedly eyeing additional worldwide growth, presumably to Southeast Asia.

“Though we consider Meituan is unlikely to realize the identical stage of working margin in meals supply in Southeast Asia as in China, a profitable acquisition in Southeast Asia might be one other key progress driver for the corporate,” Daiwa Capital Markets analyst John Choi stated.

Earlier this yr, Meituan stated it could purchase synthetic intelligence (AI) startup Gentle Yr established by Meituan co-founder Wang Huiwen for $281 million. The acquisition comes as main expertise companies enhance AI bets within the wake of pleasure created by ChatGPT from Microsoft-backed OpenAI.