Meituan's Q3 Results Impress Due To Pandemic Aftermath As Alibaba, Tencent Suffer

Author: Anusuya Lahiri | November 25, 2022 12:57pm

Meituan (OTC:MPNGF) (OTC:MPNGY) reported third-quarter revenue growth of 28% year-on-year to RMB62.6 billion.
The growth affirmed resilient demand in China for takeaway from people confined to home during the pandemic, Bloomberg reports.
Core local commerce revenue grew 24.6% Y/Y. The segment's operating profit increased by 124.6% Y/Y to RMB9.3 billion. The total order volume of food delivery and Meituan Instashopping businesses increased by 16.2% Y/Y.
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Revenue from the New initiatives segment increased by 39.7% Y/Y to RMB16.3 billion, mainly driven by the growth attributable to the goods retail businesses. Operating loss narrowed slightly on a sequential basis to RMB(6.8) billion.
"Thanks to our continuous exploration and innovative services on the demand and supply of the retail industry, Meituan continued to achieve steady growth this quarter," said Meituan Founder and CEO Xing Wang.
Meituan CFO Shaohui Chen said, "In this quarter, the evolving retail formats represented by on-demand retail have brought multiple benefits, including improving the experience for consumers and digitalizing brick-and-mortar businesses."
The report noted, despite persistent losses, Meituan is one of the few Chinese internet giants that's managed to sustain robust growth through an economic slowdown, punishing COVID restrictions and a regulatory crackdown that's wiped out expansion at most of its peers, from Tencent Holdings Ltd (OTC:TCEHY) to Alibaba Group Holding Ltd (NYSE:BABA).
Its core business of delivering meals has remained resilient even as its travel arm withered, while discipline on spending and subsidies has helped keep losses in check.