China’s Meituan reports wider loss, revenue rises

BEIJING (Reuters) -Chinese food stuff shipping enterprise Meituan on Friday reported a superior than envisioned 30.6% rise in fourth-quarter earnings at the exact same time as investment decision in new initiatives increased losses and charges connected to regulatory scrutiny rose.

Meituan, whose expert services also contain restaurant opinions and bicycle-sharing, mentioned profits rose to 49.52 billion yuan ($7.78 billion) in the final a few months of 2021.

Consensus analysts expectations were being for 49.20 billion yuan, Refinitiv data confirmed.

The quarterly loss grew to 5.34 billion yuan from a decline of 2.24 billion yuan a year earlier, as Meituan continued to commit in initiatives including its community e-commerce unit Meituan Pick.

Meituan expects its running loss from new initiatives to narrow in 2022, CEO Wang Xing claimed on a convention get in touch with.

Chinese regulators last calendar year requested food items supply businesses to deliver their employees with insurance coverage and shell out revenue above the least wage.

Jointly with other tech giants these types of as Alibaba Team and Tencent Holdings, Meituan was focused by a crackdown as Beijing imposed principles on a sector that had been largely unregulated.

Its Hong Kong-shown shares have lost fifty percent their price in the final 12 months.

Friday’s effects showed Meituan’s food stuff shipping-associated expense, which involves spending supply riders, improved by 38.3% in the quarter to 68.18 billion yuan.

Revenue in new initiatives rose 58.7% yr in excess of year to 14.67 billion yuan.

Profits from food stuff supply, accounting for over half of Meituan’s revenue, greater 21.3% to 26.13 billion yuan.

The business also for the 1st time disclosed its commission income, which made up about 30% of its meals shipping and delivery revenue in the quarter.

Meituan claimed before this month it would reduced commission billed to some merchants.

That contains halving engineering provider costs for suppliers in pandemic-impacted places, capped at one yuan per purchase, soon after Chinese regulators asked foodstuff shipping and delivery corporations to reduce service fees to help reduced charges for catering businesses strike 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)