Chinese food delivery giant Meituan surges on positive earnings
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3690
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Investing.com– Shares of Chinese food delivery app Meituan (HK:3690) rose sharply on Monday, tracking stronger-than-expected earnings as the firm ducked a broader slowdown in the Chinese economy and consumer spending.
Meituan’s Hong Kong shares jumped 8.1% to a four-month high of HK$95.35, underpinning a 0.4% rise in the broader Hang Seng index.
The firm clocked revenue of 73.7 billion yuan ($10 billion) in the quarter to December 31, and also swung to a profit for the period from a loss a year ago.
Earnings for the firm, which offers services including quick groceries, ride-sharing and maps- were boosted by a growing push into Hong Kong markets. Meituan had set up a new food delivery unit in Hong Kong last year, broadening its scope from mainland markets.
But Meituan’s local market benefited from China’s reopening, with the firm’s core delivery services business clocking strong growth as demand rebounded from 2022 lows. Meituan’s 2022 earnings were dampened by China’s strict anti-COVID measures, which were lifted only in early-2023.
A rebound in travel and recreational demand also saw hotel bookings on its platform jump 100% through 2023.
Still, the Chinese economy is grappling with a sustained decline in consumer spending and business activity. Weak spending also saw the country slip into deflationary territory in late-2023, with consistent monetary stimulus measures doing little to alleviate this pressure.
