BEIJING, June 2 (TMTPOST)— Another Chinese internet giant posted better-than-expected financial results in the start of the year, further underling resilience of the country’s tech sector facing headwinds including the COVID-19 lockdowns.
Source: Visual China
During the quarter ended March 31, 2022, Meituan, China’s largest on-demand services provider, recorded revenue of RMB46.27 billion with a 25% year-over-year (YoY) increase, beating the Wall Street expectation of RMB45.29 billion. The quarterly adjusted net loss narrowed 7.8% YoY to RMB3.59 billion, better than the analysts’ estimated loss of RMB4.59 billion.
The first quarter saw health growth across all the Meituan’s business lines. Revenue of its core business food delivery rose 17.4% YoY to RMB24.16 billion, largely driven by increases in the order volume and average order value. The segment raked in 3.36 billion orders that quarter, up 15.8% YoY. The food delivery giant said its performance showed resilient in the first two months of the quarter, though it was severely affected in March due to the spread of Omicron in many regions in China.
The in-store, hotel & travel segment also was affected in March, but its revenue achieved 15.8% YoY growth. Meituan said it had confidence in the consumption recovery and expected the business will resume normal growth when the pandemic is over.
The new initiatives and others segment had more stellar growth in the first quarter as its revenue jumped 47.0% YoY to RMB14.5 billion, mainly benefiting from the expansion of the goods retail businesses. The order volume of Meituan Grocery, an online supermarket focusing on meat, fruit, vegetables and other fresh foods, surged almost 120% YoY and the daily transaction volume reached a new high that quarter. Meituan noted its efforts to ensure stable supply of daily necessities in Shanghai lockdown, and added it launched a community group purchase feature for the residents in lockdowns.
"Our businesses, especially food delivery, in-store and hotel booking will continue to face short-term headwinds on the back of the resurgence of COVID cases and the weaker macro environment,” the Chief Financial Officer Shaohui Chen confided. However, Chen expressed optimistic as his company expected short-term impacts were temporary and growth of all of businesses would resume normal in post strict pandemic control periods.
Last week, Alibaba and Baidu showed their outperforming the Wall Street forecast both the top and the bottom line. Alibaba’s revenue topped the analysts’ projection, though its 8.9% YoY growth was the slowest since its U.S. listing in 2014. Baidu’ revenue edged up 1% YoY and the non-networking segment see a more robust growth of 35% in revenue, driven by cloud and other artificial intelligence (AI) businesses as sales of Baidu AI cloud jumped 45% yearly.