Meituan Profit, Revenue Climb Despite Fierce Competition — Update

By Tracy Qu

Meituan reported a jump in first-quarter profit and revenue, thanks to solid growth in its food-delivery business despite increasingly stiff competition.

The Beijing-based shopping-and-delivery platform's net profit rose 60% from a year earlier to 5.37 billion yuan ($740.9 million), while revenue rose 25% to CNY73.28 billion, it said Thursday.

Both measures beat the expectations of analysts polled by FactSet.

Adjusted for share-based compensation expenses, amortization of intangible assets and other items, profit was CNY7.49 billion, compared with CNY5.49 billion a year ago.

Quarterly revenue from its core local-commerce segment rose 27%, helped by robust growth in its on-demand delivery business and hotel and travel-booking services.

Revenue from delivery services rose 25%, driven by substantial growth in gross transactions. The number of on-demand delivery transactions rose 28% to 5.46 billion, offsetting lower average order value in the food-delivery and Meituan Instashopping businesses, the company said.

The company's new initiatives segment, which includes its community group-buying unit, grew its revenue by 18.5% and narrowed its operating loss to CNY2.76 billion. The improved result was due to efforts to boost operating efficiency, especially in the goods retail businesses, it said.

Meituan, a dominant player in the Chinese food-delivery market, has been looking to expand overseas to bolster growth as its domestic business slows. It is also facing fierce competition in its home market from the likes of Ele.me, the food-delivery service owned by Alibaba Group, and ByteDance's Douyin, TikTok's sister platform in China, which is trying to grab a slice of the market.

Analysts have said that KeeTa, Meituan's international food-delivery platform, will likely gain momentum after its initial success in Hong Kong.

KeeTa has seen its Hong Kong market share by order volume jump to 44% in March from 2% in July, Citi analysts led by Alicia Yap said in a recent note. Meituan is expected to follow the Hong Kong playbook when it launches KeeTa in other markets, they said.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

June 06, 2024 07:11 ET (11:11 GMT)

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