MEITUAN’S quarterly revenue beat estimates after its core food delivery business expanded, offering a positive signal to investors increasingly worried about domestic consumer malaise.
The dominant player in Chinese meal delivery reported revenue of 82.3 billion yuan (S$15 billion) for the June quarter, compared to the 80.4 billion yuan projection.
“Our on-demand delivery business maintained steady growth in the second quarter and further improved its operation efficiency,” the company said in a statement.
Meituan’s outperformance stands out during a dismal earnings season for Chinese consumer-oriented companies. PDD Holdings, long viewed as a major beneficiary of China’s consumption downgrade, stunned markets with an unexpectedly gloomy business outlook this week, triggering a record sell-off in its US shares. Like PDD, Meituan is considered a more resilient model during an economic downturn.
Meituan’s shares are up about 25 per cent this year, after losing more than half of their market value in 2023. The company has consistently outperformed projections on growth, suggesting it’s coping with up-and-coming rivals like Kuaishou Technology and ByteDance, which join Alibaba Group Holding in the Chinese meal-delivery sector.
Investors are keeping an eye also on its international expansion – emblematic of a push by Chinese companies to seek growth abroad as competition at home intensifies. In February, billionaire founder Wang Xing took direct control of the company’s overseas businesses, now centreed on the Keeta app for Hong Kong.
Persistent weakness in sentiment among mainland Chinese consumers probably resulted in more merchant-user adoption of Meituan’s lower-cost, group-based food delivery programme, Pin Hao Fan, to drive stronger-than-expected CLC revenue. A rise in perks under its fee-based Shen membership programme for on-demand services could have also helped boost 2Q orders and average spending to lift revenue. BLOOMBERG
