Meituan net soars 374pc to 6.3b yuan in quarter

Chinese food delivery giant Meituan (3690) beat market revenue forecasts as its third quarter net profit surged 374 percent, driven by a recovery in on-demand services after the end of restrictions imposed to curb the spread of Covid-19.

Net profit for the three months ended September, was 6.32 billion yuan (HK$7.44 billion), up from 1.33 billion yuan a year earlier. The non-IFRS adjusted net profit rose 5.8 percent to 2.05 billion yuan.

Meituan said revenue rose 28.8 percent in July-September versus the same period a year prior to 35.40 billion yuan. That compared with the 33.88 billion yuan average of 15 analyst estimates,.

Food delivery, which accounts for over half of Meituan's total revenue, posted revenue growth of 32.8 percent to 20.69 billion yuan. Its in-store, hotel and travel sector saw its first revenue growth since the pandemic - a rise of 4.8 percent to 6.48 billion yuan. The number of transacting users was up 9.4 percent to 476.5 million.

The number of active merchants rose 9.5 percent to 6.5 million.

The company said Chinese consumers' desire for leisure travel mostly recovered during the quarter, although consumers' preferred travel destinations shifted to domestic from overseas, which allowed it to leverage its "competitive advantages domestically".

Beijing-based Meituan has been expanding into new areas, such as fresh food - a sector boosted by pandemic lockdown measures. In July, it launched group-buying business Youxuan to explore fresh food opportunities in China's small cities. Meituan has pledged to grab a slice of this booming market, with a goal to introduce the service to 1,000 cities by year-end.

Shares of Meituan were down 7.05 percent before the earnings results in Hong Kong.