Chinese food delivery giant Meituan reports 28.2% growth in revenue

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Chinese food delivery giant Meituan reports 28.2% growth in revenue

BEIJING Chinese food delivery giant Meituan reported better than expected revenue growth of 28.2 per cent on Friday and swung back to profit as the company recovered from COVID 19 curbs.

Meituan, whose services include restaurant reviews and bike-sharing, said total revenue rose to 62.62 billion yuan $8.74 billion in the three months ended September, compared to analysts' average estimate of 61.79 billion yuan.

The company pulled the brakes on heavily funding its new initiatives when it went to a quarterly profit of 1.22 billion yuan from a loss of 9.99 billion yuan a year ago.

Sales from new initiatives, including its community e-commerce business Meituan Select, increased by 39.7 per cent year-on-year, to 16.29 billion yuan.

Revenue from core local commerce, which includes food delivery and hotel and travel businesses, rose 24.6 per cent to 46.33 billion yuan.

The investor Tencent Holdings, China's social media and gaming giant, said last week that it would return capital to shareholders through a dividend distribution of its $20 billion stake, which represents roughly 15.5 per cent of the total shares issued.

At the time of the divestment, Meituan said it would maintain its mutually beneficial business relationship with Tencent.

In the last 12 months, Meituan s Hong Kong-listed shares have lost half of their value.

Analysts warned that there will be a bigger impact on consumer demand for Meituan's businesses over the fourth quarter due to tightened pandemic controls in several major Chinese cities, including Beijing, Guangzhou and Chongqing.