China's Meituan swings to profit on food delivery rebound, flags headwinds
By Casey Hall
SHANGHAI (Reuters) -Chinese food delivery giant Meituan on Thursday posted a bigger-than-expected 33.4% rise in second-quarter revenue, defying a slowing Chinese economy, though executives warned of headwinds for its core business in the quarter ahead.
Meituan, which offers an app that provides services such as bike-sharing, ticket-booking and maps, reported April-June revenue of 67.9 billion yuan ($9.33 billion), up from 50.9 billion a year earlier.
That beat the 66.7 billion expected by 15 analysts in estimates compiled by Refinitiv Eikon.
It posted a net profit of 4.7 billion yuan versus a loss of 1.1 billion yuan a year earlier.
Last year's April-June quarterly results were hit by China's COVID-19 containment measures, which included a strict two-month lockdown in Shanghai that made the city largely inaccessible to delivery services.
China's post-pandemic recovery has lost steam in recent months as demand remained lacklustre at home and weakened abroad, giving rise to a trend that has seen low-cost and discounted products become the focus for platforms and shoppers.
On a call with analysts following its earnings release, the company said that average order value in the quarter declined year-over-year but increased use of discount coupons and livestreaming helped merchants increase their reach and order volumes.
Revenue from core local commerce, which includes food delivery and non-food delivery service Meituan Instashopping, rose 39.2% to 51.2 billion yuan.
CEO Wang Xing flagged that the third quarter would likely be tougher for the food delivery business as macroeconomic headwinds and extreme weather events, including record-breaking rainfall in regions such as Beijing, prove challenging in the short
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