Chinese food delivery giant Meituan on Monday reported third-quarter revenue that beat market forecasts, driven by a recovery in on-demand services after the end of restrictions imposed to curb the spread of COVID-19.
Meituan, whose services include restaurant reviews and bike-sharing, said revenue rose 28.8% in July-September versus the same period a year prior to 35.40 billion yuan ($5.38 billion).
That compared with the 33.88 billion yuan average of 15 analyst estimates, IBES data from Refinitiv showed.
Profit rose 374.1% to 6.32 billion yuan from 1.33 billion yuan a year earlier, the company said in a stock exchange filing.
Food delivery, which accounts for over half of Meituan‘s total revenue, posted revenue growth of 32.8% to 20.69 billion yuan.
The in-store, hotel and travel sector saw its first revenue growth since the pandemic – a rise of 4.8% to 6.48 billion yuan.
The company said Chinese consumers’ desire for leisure travel mostly recovered during the quarter, although consumers’ preferred travel destinations shifted to domestic from overseas, which allowed it to leverage its “competitive advantages domestically”.
Beijing-based Meituan has been expanding into new areas, such as fresh food – a sector boosted by pandemic lockdown measures. In July, it launched group-buying business Meituan Select to explore fresh food opportunities in China’s small cities.
Earlier this month, the government published draft rules aimed at preventing monopolistic behaviour by internet firms, and which could intensify regulatory scrutiny over e-commerce marketplaces, payment services and food delivery platforms.
Meituan shares fell 8% following the publication.
“We are creating constructive dialogues with the regulatory authority to better understand the spirit of the consultation paper,” Chief Executive Wang Xing said on a conference call, adding the draft rules were supportive of the whole technology industry in the long term.