Chinese food delivery giant Meituan beats revenue estimates

SHANGHAI (Reuters) -Chinese food delivery giant Meituan posted a bigger than expected 21% rise in second-quarter revenue on Wednesday, defying a slowing Chinese economy.

Meituan, which has an app that provides services as varied as bike-sharing, ticket-booking and maps, reported revenue in the three months to June 30 at 82.3 billion yuan ($11.55 billion), up from 67.9 billion yuan in the same period a year earlier. 

That compared with 81 billion yuan average of analyst estimates compiled by LSEG.

Its total segment operating profit for the second quarter increased from 5.9 billion yuan to 13.9 billion yuan, and the total segment operating margin increased from 8.7% to 16.9%.

A lacklustre economic recovery in China has led to more firms pivoting towards low-cost and discounted products in the world’s second-largest economy and Meituan has benefitted from delivering these goods for a small fee.

Revenue from core local commerce, which includes food delivery and non-food delivery service Meituan Instashopping, rose 18.5% to 60.7 billion yuan.

Sales from new initiatives grew by 28.7% year-over-year to 21.6 billion yuan.

Meituan remains China’s biggest delivery platform, with a 69% share of the 1 trillion yuan market, according to data from researcher ChinaIRN.

($1 = 7.1257 renminbi)