Consumer Discretionary Author: EqualOcean News, Yijuan Li Editor: Tao Ni Mar 28, 2022 09:57 PM (GMT+8)

The food delivery company increased revenues, though it still suffers net losses

Meituan

Meituan (03690: HK) (Chinese: 美团), China’s food delivery giant, recorded a revenue of CNY 49.523 billion (USD 7.768 billion) in the fourth quarter of 2021, up 30.6% year on year, according to its financial report filed on March 28.

The company also announced a net loss of CNY 5.339 billion in the fourth quarter, surging 137.9% compared to CNY 2.244 billion in the same period of the previous year. It reported an adjusted net loss of CNY 3.936 billion, up 174.0% year on year.

In terms of delivery services, Meituan changed its low-margin operating model in the fourth quarter, raising the operating profit ratio from 4.1% to 6.6%. It logged an operating revenue of CNY 1.735 billion, spiking 96.7% over the same period in 2020.

According to the report, the growth in operating revenue of this sector came from an increase in the share of online sales and a decrease in seasonal subsidies for delivery drivers. Food and beverage takeaway sales reached CNY 26.126 billion, up 21.3% over a year ago.

Other businesses also thrived. The revenue related to in-store purchases, hotels, and tourism hit CNY 8.722 billion in the fourth quarter, registering a year-on-year growth of 22.2%. This sector booked an operating revenue of CNY 3.897 billion, up 38.1% year on year, and witnessed a rise of operating profit ratio from 39.5% to 44.7%.

The revenue from new businesses and others stood at CNY 14.674 billion, up 58.7% year on year, while its net loss reached CNY 10.205 billion, a increase of 70% over the previous year.

Meanwhile, Meituan’s major expenses came from delivery riders. The report showed they cost CNY 68.2 billion in 2021, accounting for 71% of the CNY 96.311 billion revenue in the food and beverage takeaway business.

Meituan logged a revenue of CNY 179.1 billion in 2021, up 56% year on year. Its net loss was CNY 23.5 billion, compared to a profit of CNY 4.71 billion in the same period of the previous year, and its adjusted net loss was CNY 15.571 billion, compared to an adjusted net profit of CNY 3.12 billion in 2020.

As of December 31, 2021, Meituan had cash and cash equivalents totaling CNY 32.5 billion and short-term financial investments of CNY 84.3 billion. On December 31, 2020, the respective balances were CNY 17.1 billion and CNY 44 billion.