China’s Meituan reports wider loss, revenue rises

BEIJING (Reuters) -Chinese foodstuff supply corporation Meituan on Friday documented a far better than anticipated 30.6% rise in fourth-quarter earnings at the similar time as expenditure in new initiatives greater losses and charges linked to regulatory scrutiny rose.

Meituan, whose products and services also incorporate restaurant testimonials and bike-sharing, claimed income rose to 49.52 billion yuan ($7.78 billion) in the remaining a few months of 2021.

Consensus analysts anticipations were being for 49.20 billion yuan, Refinitiv information confirmed.

The quarterly reduction grew to 5.34 billion yuan from a loss of 2.24 billion yuan a 12 months earlier, as Meituan ongoing to invest in initiatives like its group e-commerce device Meituan Choose.

Meituan expects its working decline from new initiatives to slender in 2022, CEO Wang Xing stated on a meeting simply call.

Chinese regulators previous 12 months ordered meals delivery businesses to present their workers with insurance coverage and shell out profits over the least wage.

With each other with other tech giants these kinds of as Alibaba Group and Tencent Holdings, Meituan was specific by a crackdown as Beijing imposed guidelines on a sector that had been largely unregulated.

Its Hong Kong-outlined shares have shed 50 percent their benefit in the past 12 months.

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

Profits in new initiatives rose 58.7% 12 months around calendar year to 14.67 billion yuan.

Gross sales from food items delivery, accounting for more than half of Meituan’s earnings, amplified 21.3% to 26.13 billion yuan.

The organization also for the first time disclosed its commission revenue, which made up about 30% of its foodstuff shipping sales in the quarter.

Meituan said before this thirty day period it would decrease fee charged to some retailers.

That incorporates halving technologies support charges for vendors in pandemic-affected parts, capped at a single yuan per buy, soon after Chinese regulators questioned food stuff delivery providers to minimize expenses to assist decrease expenditures for catering companies 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)