China's Meituan beats Q2 estimates with slowest growth in two years
(Reuters) Chinese food delivery company Meituan on Friday reported a better-than-expected 16.4% rise in quarterly revenue from a year earlier, despite a resurgence of COVID-19 cases in China.
Revenue rose to 50.94 billion yuan ($7.42 billion) for the quarter ended in June, beating the 48.59 billion yuan expected on average by 14 analysts, Refinitiv Eikon data showed.
China experienced a surge in COVID cases in March and April that prompted lockdowns in several cities, including the commercial hub Shanghai, as part of the country's policy to cut all transmission chains for the virus, roiling supply chains, disrupting businesses and hitting consumer spending.
The curbs severely hit Meituan's delivery services and forced many vendors to shut.
While Meituan and other companies say their businesses started to revive in June as curbs eased, the spectre of COVID lockdowns continues to loom as outbreaks emerge, including in Sanya, a popular beach resort town.
Meituan, whose services also include movie ticketing and bike-sharing, said its loss for the quarter narrowed to 1.12 billion yuan, from 3.36 billion yuan a year earlier.
Sales from new initiatives, including its community e-commerce business Meituan Select, grew by 40.7% year on year to 14.16 billion yuan, partly driven by increased demand for Meituan Instashopping during the COVID resurgence.
Revenue from core local commerce, which includes food delivery and in-store, hotel and travel businesses, rose 9.2% to 36.78 billion yuan.
Analysts expect Meituan to take longer before it sees a rebound in its offline in-store and hotel operations, due to China's strict COVID-control measures.
China's tech companies reported lackluster results for the April-June period, struggling in a slowing economy that has been hit by Beijing's regulatory crackdown.
Earlier this month, Alibaba Group, owner of Meituan's rival Ele.me, reported flat quarterly revenue, its first ever.
($1 = 6.8623 Chinese yuan renminbi)
Source: Reuters; Reporting by Yingzhi Yang and Brenda Goh; Editing by Jason Neely, William Mallard and Tomasz Janowski August 26, 2022 2:56 AM PDT