Meituan Shares Surge After Buyback Plan, Earnings Beat

By Tracy Qu

Meituan shares surged after the Chinese food-delivery giant posted stronger-than-expected quarterly results and announced a share buyback.

The company's Hong Kong-listed shares were 9.5% higher at 112.60 Hong Kong dollars by midday Thursday, on track for their biggest daily percentage gain in six months.

The Beijing-based company on Wednesday said its second-quarter net profit more than doubled to 11.35 billion yuan, equivalent to US$1.59 billion, and revenue rose 21% from a year earlier to 82.25 billion yuan, with both measures beating consensus.

In a separate filing later, the food-delivery company said it will repurchase up to US$1.0 billion of shares, citing confidence in its business outlook and prospects.

Meituan delivered better-than-expected results despite a soft macroeconomic environment, Citi analysts led by Alicia Yap said in a research note.

In the second half of 2024, the company's profit growth could outpace revenue and gross transaction value growth, driven by cost optimization and other factors, they said.

Other analysts echoed the positive sentiment.

"All of [Meituan's] business segments reported better-than-expected results," Nomura analysts Jialong Shi and Rachel Guo said in a note.

They also highlighted that Meituan expects its main food-delivery business to maintain resilient volume growth in the second half, which may alleviate concerns weighing on the stock.

Citi and Nomura retained buy ratings on Meituan. Citi raised the target price to HK$155.00 from HK$140.00, while Nomura kept it at HK$135.00.

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

(END) Dow Jones Newswires

August 29, 2024 00:51 ET (04:51 GMT)

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