Meituan Announces Financial Results for the three months ended March 31, 2023

Rhea-AI Summary

Meituan announces unaudited Q1 2023 results with revenue increase of 26.7% to RMB58.6 billion. Operating profit for Core local commerce segment up by 100.7% to RMB9.4 billion. New initiatives segment operating loss narrows to RMB5.0 billion. Profit for the period is RMB3.4 billion. Adjusted EBITDA and adjusted net profit reach highest level in history. Cash and cash equivalents of RMB26.9 billion and short-term treasury investments of RMB84.5 billion as of March 31, 2023.

Positive

• Meituan's Q1 2023 results show strong revenue growth of 26.7% to RMB58.6 billion, indicating a positive performance for the company. The operating profit for the Core local commerce segment increased by an impressive 100.7% to RMB9.4 billion, highlighting the success of Meituan's retail business. The company also achieved a profit for the period of RMB3.4 billion, turning from a loss into profit on a year-over-year basis. Additionally, Meituan's adjusted EBITDA and adjusted net profit reached the highest level in its history, demonstrating the company's financial strength and growth potential. With cash and cash equivalents of RMB26.9 billion and short-term treasury investments of RMB84.5 billion, Meituan has a strong financial position to support its future endeavors.

Negative

• None.

HONG KONG, May 25, 2023 /PRNewswire/ -- Meituan (HKG: 3690) (the "Company"), a leading technology-driven retail company in China, today announced the unaudited consolidated results of the Company for the three months ended March 31, 2023.

Company Financial Highlights

During the first quarter of 2023, our revenues increased by 26.7% to RMB58.6 billion from RMB46.3 billion for the same period of 2022. Our Core local commerce segment achieved an operating profit of RMB9.4 billion for the first quarter of 2023, up by 100.7% from RMB4.7 billion for the same period of 2022. Meanwhile, the operating loss for our New initiatives segment continuously narrowed to RMB5.0 billion for the first quarter of 2023. Our profit for the period was RMB3.4 billion for the first quarter of 2023, turning from loss into profit on a year-over-year basis. Our adjusted EBITDA and adjusted net profit were RMB6.3 billion and RMB5.5 billion for this quarter respectively, reaching the highest level in our history. We also achieved operating cash inflow of RMB8.1 billion for the first quarter of 2023. We held cash and cash equivalents of RMB26.9 billion and short-term treasury investments of RMB84.5 billion as of March 31, 2023.

"During the quarter, Meituan captured consumers' diverse demand for goods and services during the consumption recovery with various businesses posting healthy growth," said Meituan Founder and CEO Xing Wang. "Meituan has witnessed the resilience of the domestic economy and the gigantic potential of consumption, and we firmly believe that we will continue to benefit from new advancements and growth opportunities in retail. As a company that integrates retail and technology, we will increase our investments in technology and innovations and actively explore the implementation of cutting-edge solutions that connects people to products and services," added Mr. Wang.

Meituan CFO Shaohui Chen said, "Meituan delivered strong growth during the quarter, boosted by strong local consumption recovery post reopening and our effective marketing measures. We will continue to incentivize consumption recovery and increase demand by optimizing our products, content offerings and fulfillment network. We are firmly committed to creating more value for all the participants in our ecosystem."

Company Business Highlights

Core local commerce

For the first quarter of 2023, segment revenue increased by 25.5% year over year to RMB42.9 billion, and operating profit increased by 100.7% year over year to RMB9.4 billion, with operating margin improving to 22.0%, compared to 13.8% in the same period of 2022. Number of On-demand Delivery transactions increased by 14.9% year over year.

Since the beginning of this year, the food delivery industry has continued to recover. We assisted new merchants in starting their businesses, and helped improve online operations of all merchants. Leveraging deeper consumer insights, we dynamically iterated our operational strategies and provided consumers with better products and services, which led to healthy growth in order volume. For instance, we swiftly adjusted our marketing strategies and user incentive schemes to capture the growing consumption demand. As a result, the number of Active Merchants and Transacting Users of the food delivery business experienced steady growth in the first quarter. Particularly, we expanded the high-quality merchant base on our platform, and the number of newly on-boarded KA and CKA merchants increased on a year-over-year basis. In addition, we piloted new marketing and promotional formats. In March, we launched a brand-new marketing event "Shen Qiang Shou" for merchants in Shenzhen. It is a promotional event that allows merchants to sell discounted high-quality products to consumers and integrates live streaming, short-form videos and other formats. In April, we upgraded our monthly marketing campaign "Shen Quan Jie". During these promotional events, merchants could offer deep-discounted deals and create mega-hit products through flash sales, live streaming or short-form videos, which effectively help merchants enhance their growth potential in combination with our existing shelf-based business model. Meanwhile, we were able to explore traffic growth, and stimulate non-instant demand by addressing consumers' coupon stockpiling needs through these live streaming events.

Meituan Instashopping continued its high growth trajectory. For the first quarter of 2023, order volume increased by around 35% year over year, driven by increases in both number of Transacting Users and transaction frequency. As we expanded product selections and leveraged marketing events, the consumer mindshare of "Everything Now" was further reinforced. During the holiday seasons in the first quarter, such as Chinese New Year, Valentine's Day and Women's Day, demand for on-demand delivery for gifts increased significantly on our platform. Annual Active Merchants increased by over 30% year over year in the first quarter of 2023, with non-food specialty stores, liquor and beverages, and flowers maintaining high growth. In addition, order mix from new supply formats increased notably, and we continued to expand its geographical coverage. We also strengthened consumer mindshare of consulting doctors and buying medicines on Meituan. During the Chinese New Year holiday, we provided more incentives as well as traffic to pharmacies that stayed open for business, and provided free online consultation services for people in certain regions. We also satisfied consumers' medicine demand related to seasonal diseases, such as flu and allergies. Thus, order volume and user base also posted strong growth for the medicine category this quarter.

As offline consumption gradually recovered in the first quarter of 2023, GTV and revenue growths of our in-store business accelerated month by month. We captured the rising demand for group gatherings and holiday meals, and launched preset in-store menus, packaged deals, and more. We continued to expand our merchant selections across service categories, and enriched our marketing and content formats. In addition, we iterated our product operating strategy and optimised the service capability of our business development team. We also enhanced synergies across business lines, and provided merchants with more promotional channels. To further stimulate consumption during Labor Day, we launched a comprehensive Meituan platform live streaming program that provides consumers with deep-discounted high-quality products, and incentivized participation from high-quality merchants. We also supported small and medium-sized merchants with online operations and helped them standardize service qualities. On the consumer side, we continued to strengthen our content capabilities and iterate short-form video formats. We introduced Special Deals to offer high-quality services at deep discounts for consumers, while allowing merchants to create and promote mega-hit products. Through these marketing events and campaigns, our consumer mindshare of finding the best deals on Meituan was further strengthened. In the future, we will continue to iterate our operations and diversify our product and service offerings, by leveraging our advantages in organizational capability, consumer mindshare, and merchant service, which ultimately will help accelerate online penetration for the in-store industry.

For the hotel and travel business, as consumption demand recovered, our room nights and GTV grew robustly in the first quarter of 2023. Specifically, room nights during the Chinese New Year holiday increased by over 40% compared to the same periods of 2022 and 2019. Room nights from local accommodations and short-distance travel scenarios also maintained high growth momentum after the Chinese New Year, and peaked for several consecutive weekends. Following the evolving consumption trends, we continued to enrich our product mix and leverage holiday promotions to enhance brand awareness. Moreover, we optimised our subsidy strategy and increased live streaming frequency. For high-star hotels, we enhanced our supply and pricing mechanism, improved the merchant information display on our platform, and deepened collaborations with high-star chain hotels. We also optimised our packaged deal products and broadened distribution channels. On the low-star front, we further improved our room renovation program, CRM tools and marketing solutions, to help merchants capture the industry recovery opportunity and satisfy diverse consumer needs. For alternative accommodations, we maintained industry leadership and continued to focus on user experience, supply optimisation, as well as operating efficiency improvement. We have strong confidence in the future growth of the hotel and travel industry in China, and we believe in our ability to meet demand from both consumers and merchants.

New Initiatives

For the first quarter of 2023, revenues from the New initiatives segment increased by 30.1% year over year to RMB15.7 billion. Operating loss for the segment decreased by 40.5% year over year to RMB5.0 billion, and operating margin improved sequentially to negative 32.0%.

Meituan Select maintained an industry-leading position and continuously improved operational efficiency. During the first quarter of 2023, we optimised our pricing and product management capabilities. We provided consumers with wider selections of value-for-money products and more convenience, through our nationwide next-day logistics and self-pickup network. The accumulative number of Transacting Users had reached 450 million by March-end. We actively promoted the circulation of agricultural products and helped farmers increase income. As a result, sales contribution from agricultural products surpassed 45% in the first quarter. We also established partnerships with local governments and suppliers in the products' places of origin, and expanded our efforts in the direct procurement of high-quality agricultural products. Through these measures, we are able to bring high-quality products directly from farms to consumers' dining tables. In addition, our engagement in rural areas helped create employment opportunities locally. For example, the number of pick-up stations in lower-tier markets has exceeded 1.3 million.

For Meituan Grocery, GTV increased by over 50% year over year in the first quarter of 2023. We continued to focus on cost control and efficiency improvement during the first quarter. We also accelerated our product circulation efficiency, and elevated consumer experience by providing better quality and more diverse product selections. In addition, we enhanced our cold-chain logistics and on-demand delivery service to strengthen consumer mindshare. Average order value and order frequency both increased compared to the same period of last year. We also improved our "Locally-sourced Selected Products" program, by deepening collaborations with local government and farmers, which not only diversified our platform's supply but also helped farmers increase income. Furthermore, we established in-depth collaborations with brands, and launched joint-branding programs in selected categories to drive sales growth.

As the consumption market gradually recovered since the beginning of 2023, demand for local services also increased robustly. On the consumer side, we coped with consumer's growing demand across goods and service categories, by leveraging our advantages in on-demand retail and local services. On the merchant front, we continued to enhance our operating solutions and marketing tools to help merchants seize the post-pandemic recovery opportunities, grow their business and improve operating efficiency. Going forward, we will continue to optimise our marketing strategies and formats to better satisfy merchants' needs for promotions and help them increase revenue and profit. In addition, we will continue to implement the "Retail + Technology" corporate strategy, leverage technology to bring new advancements and growth opportunities, fulfill our mission that "We help people eat better, live better", and create more value for all the participants in our ecosystem.

For the full announcement of Meituan for the three months ended March 31, 2023, please visit:
http://media-meituan.todayir.com/202305251729431742504632_en.pdf

About Meituan

Meituan (HKG: 3690) (the "Company") is a leading technology-driven retail company in China. With the mission of "We help people eat better, live better," the Company uses technology to connect consumers and merchants. Service offerings on its platform address people's daily needs for food and retail goods and extend further to broad lifestyle and travel services. Meituan is the world's leading on-demand food delivery service provider and China's leading e-commerce platform for in-store dining services. Meituan helps consumers discover merchant information, make informed decisions, complete online and offline transactions and enjoy on-demand delivery. The Company currently owns several household brands in China, including Meituan, China's leading online marketplace for services, Dianping, China's leading online destination for discovering local services, Meituan Waimai for on-demand delivery services, and Meituan Bikes for bike-sharing services. The Company operates in over 2,800 cities and counties in China.

Forward-Looking Statements

This press release contains forward-looking statements relating to the business outlook, forecast business plans and growth strategies of the Company. These forward-looking statements are based on information currently available to the Company and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realized in future. Underlying the forward-looking statements is a large number of risks and uncertainties. Further information regarding these risks and uncertainties is included in our other public disclosure documents on our corporate website.

For media inquiries, please contact:

Meituan
pr.global@meituan.com 
ir@meituan.com

ICR Inc.
Email: MeituanPR@icrinc.com

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SOURCE Meituan

FAQ

What are Meituan's Q1 2023 revenue and profit figures?

Meituan's Q1 2023 revenue increased by 26.7% to RMB58.6 billion, and the company achieved a profit for the period of RMB3.4 billion. These figures indicate a positive performance for the company.

How much did the operating profit for the Core local commerce segment increase in Q1 2023?

The operating profit for the Core local commerce segment increased by 100.7% to RMB9.4 billion in Q1 2023, showcasing the success of Meituan's retail business.

Did Meituan achieve a profit or a loss in Q1 2023?

Meituan turned from a loss into profit in Q1 2023, with a profit for the period of RMB3.4 billion. This indicates a positive financial performance for the company.

What are Meituan's cash and investment holdings as of March 31, 2023?

As of March 31, 2023, Meituan had cash and cash equivalents of RMB26.9 billion and short-term treasury investments of RMB84.5 billion, indicating a strong financial position to support future endeavors.