China’s Meituan reports wider loss, revenue rises

BEIJING (Reuters) -Chinese foods delivery company Meituan on Friday described a much better than anticipated 30.6% rise in fourth-quarter revenue at the exact same time as expense in new initiatives amplified losses and fees linked to regulatory scrutiny rose.

Meituan, whose products and services also consist of cafe assessments and bike-sharing, mentioned revenue rose to 49.52 billion yuan ($7.78 billion) in the last a few months of 2021.

Consensus analysts expectations have been for 49.20 billion yuan, Refinitiv information showed.

The quarterly reduction grew to 5.34 billion yuan from a decline of 2.24 billion yuan a 12 months previously, as Meituan continued to invest in initiatives which include its local community e-commerce device Meituan Decide on.

Meituan expects its operating decline from new initiatives to narrow in 2022, CEO Wang Xing claimed on a meeting simply call.

Chinese regulators last calendar year purchased food items shipping and delivery companies to provide their workers with coverage and spend income previously mentioned the minimum wage.

Together with other tech giants these types of as Alibaba Group and Tencent Holdings, Meituan was targeted by a crackdown as Beijing imposed policies on a sector that experienced been largely unregulated.

Its Hong Kong-stated shares have missing half their price in the last 12 months.

Friday’s outcomes confirmed Meituan’s foods shipping-related expense, which contains spending shipping and delivery riders, amplified by 38.3% in the quarter to 68.18 billion yuan.

Earnings in new initiatives rose 58.7% 12 months above year to 14.67 billion yuan.

Profits from food shipping and delivery, accounting for in excess of half of Meituan’s revenue, greater 21.3% to 26.13 billion yuan.

The corporation also for the 1st time disclosed its fee income, which manufactured up about 30% of its foods supply income in the quarter.

Meituan said earlier this thirty day period it would reduce fee billed to some retailers.

That includes halving technologies provider costs for suppliers in pandemic-afflicted regions, capped at just one yuan for every get, right after Chinese regulators asked foods supply firms to reduce costs to enable decreased expenditures for catering organizations hit by the pandemic.

($1 = 6.3645 Chinese yuan renminbi)

(Reporting by Yingzhi Yang and Brenda Goh modifying by Jason Neely, Barbara Lewis and David Goodman)