Chinese food delivery giant Meituan reports bigger loss, rising revenue

Chinese food delivery giant Meituan Friday reported a better-than-expected 30.6% rise in the fourth quarter incomealongside increased investment in new initiatives losses and regulatory review costs have increased.

Meituanwhose services also include restaurant reviews and bike-sharing, said income rose to 49.52 billion yuan ($7.78 billion) in the last three months of 2021.

Consensus analyst expectations were 49.20 billion yuan, according to Refinitiv data.

The quarterly loss swelled to 5.34 billion yuan from a loss of 2.24 billion yuan a year earlier, as Meituan continued to invest in initiatives including its community e-commerce unit Meituan To select.

Meituan wait for it to work loss new initiatives to scale back in 2022, CEO Wang Xing said on a conference call.

Chinese regulators ordered last year food delivery companies to provide their workers with insurance and pay them incomes above the minimum wage.

With other tech giants such as the Alibaba Group 9988.HK and Tencent Holdings 0700.HK, Meituan was the target of a crackdown as Beijing imposed rules on a sector that was largely unregulated.

He was fined $530 million in October for violating anti-monopoly regulations.

Its Hong Kong-listed shares have lost half their value in the past 12 months.

Friday’s results showed Meituanit’s food delivery-related cost, which includes the cost on delivery runners, rose 38.3% in the quarter to 68.18 billion yuan.

Income in new initiatives rose 58.7% year-on-year to 14.67 billion yuan.

Sales of food deliveryrepresenting more than half Meituanit’s incomerose 21.3% to 26.13 billion yuan in the quarter.

The company also disclosed its commission for the first time incomewhich represents approximately 30% of his food delivery quarterly sales.

Meituan said earlier this month it would cut commissions for some merchants in pandemic-hit areas, after Chinese regulators demanded food delivery solidifys to reduce fees to reduce costs for catering businesses affected by the pandemic.