Last Friday evening, Meituan, the operator of China’s largest food delivery and on-demand local services platform, released its results for the three months ended 30 September 2021. Meituan’s revenue grew 37.9% to RMB48.8bil, with its food delivery and in-store, hotel and travel segments realizing a growth in operating profit to RMB4.7bil. Nonetheless, the Hong Kong listed company reported a net loss of RMB10.1bil on the back of a fine imposed by China’s antitrust regulators, among other factors.

Meituan releases results after market last Friday

Firstly, investors may refer to the announcements on the Hong Kong exchange’s website for timely corporate updates. Simply visit the website and search for Meituan (3690 HK) in the stock code/ stock name field.

On 8 October 2021, China antitrust regulators levied a RMB3.44bil fine on Meituan for violating anti-monopoly regulations, with instructions to return RMB1.29bil of deposits stemming from exclusivity arrangements. This follows a trail of fines imposed by the Chinese government as it continues its crackdown on monopolies, with the latest being Alibaba, Tencent and Baidu ordered on 20 November to pay a total of RMB21.5mil in fines following the latest antitrust investigation.

According to an article on the South China Morning Post, Meituan’s net loss of RMB10.1bil (USD1.565bil) for the latest quarter missed analysts’ estimates for a RMB7bil loss. This is against Meituan’s RMB6.3bil profit for the same period last year.

Meituan’s revenue grew 37.9% to RMB48.8bil, with its food delivery and in-store, hotel and travel segments realizing a growth in operating profit to RMB4.7bil from RMB3.6bil in the same period last year, despite concerns on the Delta variant and the macro-economic environment during the quarter.

However, besides the fine, Meituan’s ‘new initiatives and others’ segment, which includes group buying, recorded an operating loss of RMB10.9bil, compared with a RMB2bil loss in the same quarter last year; revenue increased by 66.7% year-on-year to RMB13.7bil, causing operating margin to decrease by 2.7% quarter-on-quarter to -79.5%.

Source: Macquarie Research - 29 Nov 2021