Meituan makes history with gigantic net loss

Business | Tereza Cai 12 Mar 2019

Reuters and

Meituan Dianping (1690), the second listed stock with weighted voting rights after Xiaomi (1810), posted that its net loss widened 5.1 times from 2017 to 115.48 billion yuan (HK$134.82 billion) in 2018, the largest full-year losses of listed companies in local history.

It is partly due to the fair value changes of preferred shares, which increased to a loss of 104.6 billion yuan in 2018 from a loss of 15.1 billion yuan in 2017, resulting from a significant increase in the valuation of the company, which was determined by the offering price in the initial public offering in September 2018, the company said.

Total revenue rose 92.3 percent to 65.23 billion yuan.

As the world's largest food delivery service provider, its revenue from food delivery increased 81.4 percent year on year to 38.1 billion yuan, and in 2018, revenues from in-store, hotel and travel, increased 46 percent to 15.8 billion yuan.

Revenues from the new initiatives and others segment increased by 450.3 percent to 11.2 billion yuan in 2018, and gross margin was negative 37.9 percent in 2018, compared with positive 46 percent in 2017.

Its net losses for the fourth quarter widened 56.6 percent to 3.41 billion yuan, while the revenue surged 89 percent to 19.8 billion yuan.

During the three months, revenues from the food delivery segment increased 66.1 percent to 11 billion yuan, and revenues from the in-store, hotel & travel segment increased 48 percent to 4.6 billion yuan. Revenues from the new initiatives and others segments rocketed 462.1 percent to 4.2 billion yuan.

The half-year freezing period of Meituan Dianping is due next Wednesday, and may add pressure to its stock price.

Meituan completed the acquisition of Mobike in April 2018.

Chinese bike-sharing company Mobike, backed by Tencent (0700) said on Monday it will pull out of some Asian countries and re-evaluate its units in other overseas markets amid a wide-scale contraction in the market and the bankruptcy of top competitor Ofo.

The company, launched its orange bikes in Australia, Europe, and the United States, said it will lay off at least 10 staff as part of its restructuring plan.

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