Meituan Dianping’s quarterly earnings beat estimates as China food delivery market recovers

The Beijing-based company has built up a delivery network that covers more than 2,800 cities, where more than 1 million daily active delivery riders are deployed

China is seeing further digital transformation of the traditional catering business, with more activities moving online

Reading Time:2 minutes

A Meituan Dianping delivery worker crosses a street in Beijing's central business area on June 30. Photo: Reuters

Published: 9:42pm, 21 Aug 2020Updated: 11:02pm, 21 Aug 2020

Meituan Dianping, China’s largest on-demand services provider, beat second-quarter earnings estimates on Friday, as demand for food delivery recovered across the country after the coronavirus lockdowns.

The Beijing-based company reported on Friday a 152.4 per cent increase in net profit to 2.2 billion yuan (US$318 million) in the quarter ended June 30, up from 875.8 million yuan in the same period last year, primarily because of an increase in tax returns and preference. Market analysts’ consensus estimate gathered by Bloomberg had forecast a 643 million yuan loss.

Revenue rose 8.9 per cent to 24.7 billion yuan from 22.7 billion yuan a year ago, as food delivery services from both consumers and merchants increased in the second quarter. That was ahead of the 23.6 billion yuan consensus estimate.

“In the second quarter, we utilised advanced digital operations tools to enable more merchants, enhanced our on-demand delivery infrastructure … and accelerated the online penetration … of essential local services,” said Wang Xing, co-founder and chief executive of Meituan in a conference call with analysts, after the firm announced its latest quarterly results on Friday.

Meituan Dianping’s app on Apple’s App Store is seen on an iPhone. Photo: Bloomberg

The strong financial results showed how Meituan and its domestic market have quickly recovered since posting its first quarterly revenue drop in the three months ended March 31, when the coronavirus pandemic disrupted its food delivery operations and other businesses across the country.

China is seeing further digital transformation of the traditional catering business, with more activities moving online, according to a report by iiMedia Research. It said the country’s food delivery service surpassed 650 billion yuan last year, when there were more than 460 million users.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x