By Yingzhi Yang and Brenda Goh
BEIJING/SHANGHAI (Reuters) – China’s Meituan Dianping <3690.HK>, an online food delivery-to-ticketing firm, posted its first ever quarterly profit as a listed firm, as a surge in summer food delivery orders helped it beat competition from rivals including Alibaba-backed Ele.me.
Meituan, backed by Chinese gaming giant Tencent Holdings Ltd <0700.HK>, said it swung to a profit of 875.8 million yuan in the three months to end-June from a loss of 7.72 billion yuan (£892.65 million) in the year-ago period, the first time it reported a profit since the company listed in September last year.
Total revenue rose 50.6% to 22.7 billion yuan for the second quarter ended June 30 from 15.07 billion yuan a year earlier, beating forecasts. Analysts on average expected the company to report revenue of 21.87 billion yuan, according to I/B/E/S data from Refinitiv.
Second-quarter gross transaction volume grew 28.7% to 159.2 billion yuan, with total number of transacting users reaching 422.6 million.
Food delivery, which accounts for more than half of its revenue, reported gross profit of 2.86 billion yuan in the quarter, more than double the 1.41 billion yuan for the same period a year earlier, as it extended its lead in China’s competitive food-takeout market.
Market researcher Trustdata said in a note earlier this month that Meituan grabbed a nearly two-third share of the country’s food-takeout market in the second quarter, while Ele.me took just over a quarter.
“We believe after this summer, there should be no significant changes in the market share structure,” Leo Liu, analyst at China Merchants Securities, wrote in a research note dated Aug 2.
June quarter revenue from Meituan’s in-store, hotel booking, and travel sector businesses rose 42.8% to 5.2 billion yuan.
Its stock, having dropped to its lowest early this year, has clawed back up and is trading around its IPO price of HK$69 (£7). By market capitalisation, it is the third-largest Chinese technology company behind Alibaba Group Holding Ltd <BABA.N> and Tencent.
(Reporting by Yingzhi Yang in Beijing and Brenda Goh in Shanghai; Editing by Muralikumar Anantharaman)