Meituan Dianping Publishes 2019 Annual Report, Finally Breaks Even

Author: Chendi Qian Mar 31, 2020 12:30 AM (GMT+8)

The number of users has reached 450.5 million, up by 12.5% year-on-year.

Image credit: Meituan Dianping official website

On March 30, Meituan Dianping (3690:HKEX) published its 2019 annual and financial report (in Chinese). In 2019, the platform's revenue reached CNY 97.5 billion (USD 13.73 billion), a year-on-year increase of 49.5%. For the first time, the company gained profits, gross profit reached CNY 32.3 billion (USD 4.56 billion). By comparison, in the previous year, its losses were valued at CNY 8.35 billion (USD 1.18 billion).

As for the fourth quarter of 2019, Meituan's revenue reached CNY 28.2 billion (USD 3.97 billion), with a year-on-year increase of 42.2%; adjusted net profit was CNY 22.7 billion (USD 3.2 billion). Upon closing on March 30, the shares of China's third-largest Internet player were trading in Hong Kong at USD 11.6 apiece.

Meituan Dianping was established in 2010, with its headquarters in Beijing. It went public in September 2018. The firm's main assets include Meituan food delivery, Dianping, Mobike, sharing chargers and others. After several funding rounds and acquisitions, the firm has reached a significant scale in the Chinese market. 

Last year, Meituan's transaction users hit 450.5 million, while active businesses registered on the platform totaled at 6.2 million. The average number of transactions per user per year was 27.4, up 15.4% from 2018.

As for its various business income sectors in 2019, the food delivery business accounted for 56.2% of the revenue, and gross profit increased by 94.2% to CNY 10.2 billion (USD 1.44 billion). Revenue from in-store, hotel and tourism business occupied 22.9%, and gross profit increased by 40.1% to CNY 19.7 billion (USD 2.77 billion). New business and others accounted for 20.9%, and gross profit increased from a negative CNY 4.3 billion (USD 610 million) in 2018 to a positive value of CNY 2.3 billion (USD 320 million).

It's obvious that three business sectors all performed well in 2019, especially the new business which turned loss into profit, while the in-store, hotel and tourism business contributing a lot with gross profit margin of 88.6%. As pointed out in their financial reports, this food delivery giants' new interests include sharing bicycles, online cars, grocery sales and more. The grocery sales allow the company to meet the demand for special vertical products, such as medicines and flowers, which showed strong growth in the past year.

In the first quarter of 2020, Meituan claimed that the COVID-19 affected a lot of its business, both the on-demand side and the supply side. As a result, there is a predicted operating loss for this period. Since it will take some time for businesses and users to recover to normal levels, the impact will surely be felt in the following quarters too. 

This year marks the tenth anniversary of the establishment of Meituan Dianping.