Revenue leaps as Meituan cuts loss

Business | Kevin Xu 24 May 2019

Meituan Dianping (3690) says its net loss for the first quarter this year shrank 93.2 percent year-on-year to 1.43 billion yuan (HK$1.62 billion).

Total revenue rose 70.1 percent year-on-year to 19.17 billion yuan, benefiting from strong revenue growth across all major business segments, but decreased by 3.2 percent quarter-on-quarter from 19.8 billion yuan in the three months ended December 31, 2018, due to seasonality.

Shares of Meituan fell 5.75 percent to HK$58.15.

Revenue from food delivery jumped by 51.7 percent to 10.7 billion yuan in the first three months compared with the same period last year, and revenues from in-store, hotel and travel increased by 43.2 percent year-on-year to 4.5 billion yuan. Revenues from new initiatives and others segment in the first quarter rocketed to 3.9 billion yuan, up by 267.8 percent year-on-year.

Gross margin fell to 26.4 percent, down 2.1 percent compared with a year earlier while gross transaction volumes rose by 28 percent to 138.4 billion yuan, with the number of users reaching 412 million.

Meituan said it continued to restructure Mobike's overseas operations to further narrow the losses in the bike-sharing service in the first three months.

The Chinese internet services provider completed the acquisition of Mobike in April last year, but it said the overseas business of the bike-sharing company "cannot bring sufficient strategic synergy" to the platform to justify the costs.

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