Meituan reports strong Q3 earnings

November 29, 2024 09:21 PM AEDT | By Investing

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Investing.com -- Meituan (HK:3690) reported a strong set of results for the third quarter of 2024, with revenue and profitability beating market expectations and posting robust growth across its key business segments.

Total (EPA:TTEF) revenue grew by 22.4% year-over-year to RMB93.6 billion, coming in ahead of consensus forecasts. Core local commerce remained a standout performer, with revenue rising 20.2% year-over-year to RMB69.4 billion.

The growth was supported by a 14.5% increase in on-demand delivery transactions, which reached 7.08 billion during the quarter.

Operating profit in this segment reached RMB14.6 billion, with an operating margin of 21%, reflecting continued efficiency improvements and sustained demand.

Jefferies analysts flagged that the segment’s margin expansion is a positive sign of Meituan’s ability to optimize operations in a competitive landscape while maintaining a focus on consumer engagement and service quality.

New initiatives, another critical growth driver, saw revenue grow by 28.9% year-over-year to RMB24.2 billion. Importantly, the operating loss in this segment narrowed to RMB1.0 billion, reflecting progress in scaling these businesses more efficiently.

Jefferies commented on the company’s approach to investments in new ventures, noting that the better-than-expected loss reduction demonstrates Meituan’s focus on achieving sustainable growth in these emerging areas.

At the group level, Meituan posted an adjusted net profit of RMB12.8 billion, exceeding market expectations.

Jefferies noted that the company’s ability to deliver such robust profitability despite ongoing investments in its newer initiatives underscores the strength of its core business model and strategic agility.

This article first appeared in Investing.com

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