Meituan Announces Financial Results for the Three Months Ended September 30, 2022

Rhea-AI Summary

Meituan (HKG: 3690) reported a 28.2% revenue rise to RMB62.6 billion in Q3 2022 versus RMB48.8 billion in Q3 2021. The Core local commerce segment's operating profit surged to RMB9.3 billion, up 124.6% YoY, while the New initiatives segment saw a revenue increase of 39.7% YoY to RMB16.3 billion. Adjusted EBITDA and net profit turned positive at RMB4.8 billion and RMB3.5 billion respectively. Cash reserves stood at RMB23.3 billion and short-term investments at RMB88.3 billion as of September 30, 2022.

Positive

• Revenue increased by 28.2% YoY to RMB62.6 billion.
• Core local commerce operating profit up 124.6% YoY to RMB9.3 billion.
• New initiatives revenue rose 39.7% YoY to RMB16.3 billion.
• Adjusted net profit reached RMB3.5 billion, turning positive YoY.

Negative

• New initiatives segment operating loss was RMB6.8 billion.

HONG KONG, Nov. 25, 2022 /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 September 30, 2022.

Company Financial Highlights

During the third quarter of 2022, our revenues increased by 28.2% to RMB62.6 billion from RMB48.8 billion for the same period of 2021. Our Core local commerce segment achieved an operating profit of RMB9.3 billion for the third quarter of 2022, up from RMB4.2 billion for the same period of 2021, while the operating loss for our New initiatives segment continuously narrowed to RMB6.8 billion for the third quarter of 2022. Our adjusted EBITDA and adjusted net profit were RMB4.8 billion and RMB3.5 billion for this quarter respectively, turning from loss positions to profit on a year-over-year basis and having remarkable increases on a quarter-over-quarter basis. We held cash and cash equivalents of RMB23.3 billion and short-term treasury investments of RMB88.3 billion as of September 30, 2022.

"Thanks to our continuous exploration and innovative services on the demand and supply of the retail industry, Meituan continued to achieve steady growth this quarter," said Meituan Founder and CEO Xing Wang. "Under the 'Retail + Technology' strategy, we have been firmly focused on our mission of helping people eat better, live better. Going forward, we will continue to accelerate the digital transformation of the life services and retail sectors through technological innovations, to help integrate the digital economy with the real economy, and to make efforts for our consumers and ecosystem partners in pursuing better lives," concluded Wang.

Meituan CFO Shaohui Chen said, "In this quarter, the evolving retail formats represented by on-demand retail have brought multiple benefits, including improving the experience for consumers and digitalizing brick-and-mortar businesses. In the future, Meituan will continue to strengthen its core capabilities for its users, merchants, couriers, and our ecosystem partners. We will create long-term value for all industry participants."

Company Business Highlights

Core local commerce

In the third quarter of 2022, we achieved solid revenue growth of 24.6% on a year-over-year basis for the Core local commerce segment, despite negative impacts from the pandemic. Operating profit increased by 124.6% on a year-over-year basis to RMB9.3 billion, and operating margin improved to 20.1%.

During the quarter, the total order volume of our food delivery and Meituan Instashopping businesses increased by 16.2% on a year-over-year basis. We continued to focus on high quality growth for the food delivery business, with daily order volume exceeding 60 million on the highest single day in early August. On the consumer side, we effectively met more diverse demand across different scenarios, using our optimized marketing tactics, refined operations and diversified campaigns. As a result, the number of Transacting Users on our platform continued to grow steadily, and quarterly consumption frequency reached a record high. On the merchant side, we onboarded more restaurants in the breakfast, afternoon tea and late-night snacks categories, and subsequently increased the number of Active Merchants on our platform. Moreover, we iterated our marketing tools to help merchants attract and retain customers. We also simplified our digital solutions, optimized the operational mechanism, enhanced the user-friendliness, and improved the recommendation features, to bring better using experience and higher operating efficiency to the merchants, which further helped accelerate the digital transformation of the restaurant industry.

Meituan Instashopping maintained high growth momentum in the third quarter of 2022, with categories such as supermarkets, flowers, liquor and beverages, non-food specialty stores, and pet care continuously growing rapidly. The year-over-year growth in user base, purchase frequency, and retention rate all accelerated, thanks to the rising demand from consumers and the optimized supply on our platform. Daily order volume reached new high to 9.7 million on Chinese Valentine's Day in August. During the quarter, we continued to strengthen our collaborations with mainstream brands and continued to form new strategic partnerships. For example, the number of authorized sellers for Apple on our platform expanded to over 200 cities, and the sales volume of iPhone 14 on its launch day grew robustly. Moreover, we onboarded hundreds of Suning stores to our platform and initiated strategic alliances. Subsequently, both the number of Active Merchants and number of newly-onboarded merchants grew by 30% on a year-over-year basis. We are proud that the consumer mindshare of Meituan Instashopping as being able to deliver everything to their doorsteps has further strengthened, and we will continue to satisfy their demand with better products and services going forward.

As our business grows, we also continue to shoulder more social responsibilities to create more local job opportunities across the country, and continue to enhance the welfare and benefits for our couriers. In the third quarter, we further optimized our order dispatch system and encouraged restaurants to upload the estimated pick-up time, so that the couriers can plan ahead and avoid early arrival at restaurants to save their time. We also worked relentlessly to help improve the job satisfaction and sense of fulfillment of our couriers. For example, on the annual "Couriers' Day" on July 17, we hosted a number of events for couriers and their families, to distribute holiday gifts and rewards for the couriers' diligent work and continuous service amid the pandemic. In addition, when extreme heat swept the country this summer, we not only adjusted the maximum delivery distance in our order dispatch system, but also offered protections, subsidies and other types of benefits for couriers working under high temperature conditions.

Our in-store, hotel and travel business demonstrated resilience, especially during summer holidays, with the number of annual Active Merchants and quarterly Transacting Users both reaching historical highs. We continued to iterate our operational strategy, provided more convenience and efficiency to our merchants and consumers, and assisted local governments in distributing consumption vouchers to stimulate local consumption. Thanks to our comprehensive product coverage, as well as the ability to capture the rapidly changing consumption trends, we were able to continually optimize supply, enhance cross-sell, and meet the vast demand from consumers. In addition, we continued to onboard chain restaurants in the light-meal and fast food categories and offered differentiated digital solutions, helping them broaden their product coverage and expand transaction scenarios. We also launched a self-pickup function for restaurant merchants, and provided online marketing support and operational tools. Other in-store service categories, such as pet care and medical services, maintained solid revenue growth during the quarter, while camping and other trendy consumption categories boomed during the summer time. Furthermore, we continued to innovate new content formats and optimized content display on the platform, to provide better user experience and help consumers make effective decisions. Going forward, we will continue to iterate our operations to provide more convenience and efficiency for the merchants and consumers.

The ongoing pandemic continued to bring challenges to our hotel & travel business, especially in September, during which, some tourist cities were heavily impacted by the outbreaks. Nevertheless, demand for local accommodations was relatively resilient and continued to outpace inter-city travel activities. We leveraged our competitive advantage to feature specialty local tours and accommodations in selected high-tier cities, and successfully captured consumer demand. We also collaborated with hotel brands, such as Marriott Group, and launched joint marketing events and joint-membership schemes, to deepen our market penetration in the high-star hotel market. In addition, we continued to collaborate with theme parks through special marketing events to help merchants acquire traffic and withstand difficult times.

New Initiatives

In the third quarter of 2022, revenue from the New initiatives segment increased by 39.7% on a year-over-year basis to RMB16.3 billion, mainly driven by the growth attributable to the goods retail businesses. Operating loss narrowed slightly on a sequential basis to RMB6.8 billion, while operating margin improved to negative 41.6%, primarily attributable to an improvement in operating efficiency from the goods retail businesses.

For Meituan Select, we continued to focus on high-quality growth, and upgraded our brand positioning to "Next-day Supermarket" ("明日達超市") to capture the latest consumption trends and to deliver a clearer message to our consumers. Currently, the upgraded brand has covered nearly 3,000 cities and counties, allowing us to better satisfy consumer demand for wider selections of products with higher quality and more affordable prices. Through the nationwide logistics and self-pickup networks we built, we facilitated the integration between digital economy and real economy. During the third quarter, we continued to improve our supply chain and logistics capabilities, and maintained our market leadership. In addition, we enhanced our core competence in product selection, pricing strategy, fulfillment efficiency, and supply chain management. We innovatively piloted an industry-leading smart-sorting system, bringing better fulfillment experiences for consumers, while continually enhancing our fulfillment efficiency at reduced costs. We also continued to optimize our cold-chain logistics and applied it to broader categories, including meat and poultry, aquatic products and frozen foods. Leveraging the nationwide logistics network, we continually supported "rural revitalization" and the circulation of agricultural products, which contributed an increasingly higher mix of our total sales. During the pandemic outbreaks, we actively participated in the pandemic control scheme, and supported local authorities in providing sufficient supply of food, beverages and daily necessities for people from the affected regions.

Meituan Grocery continued to experience strong year-over-year growth, which was a result of our improved product and service offerings and enhanced consumer mindshare. We expanded our products to broader categories and selections, while increasing the supply of local and seasonal products. We launched a "Locally-sourced Selected Product" ("本地尖貨") program and worked closely with local governments and farmers from the products' places of origin, allowing these products to effectively reach local consumers. In addition, we worked with local governments in providing practical trainings for "new farmers", to help them to grow and sell agricultural products. We believe that these measures will deepen the integration of the service industry with the agriculture industry, and effectively help farmers increase production volume and personal income.

Although the pandemic has brought short-term impacts, we have full confidence in the long-term development of our businesses and we firmly believe that local consumption will eventually recover to its normal growth trajectory when the pandemic is over. We remain committed to our "Retail + Technology" strategy, and aim to facilitate the digital transformation process across industries. We will continue to leverage our core competence as a technology-driven retail company with nationwide business operations, and provide better products and services for our consumers and merchants. Meanwhile, to shoulder our social responsibilities, we will continue to help small and medium-sized merchants to cope with difficult times, create more job opportunities, and help improve welfare and benefits for our couriers. We will work relentlessly to promote "rural revitalization", create more value for consumers and merchants, and contribute to the high-quality development of the national economy.

For the full announcement of Meituan for the third quarter of 2022, please visit:
http://media-meituan.todayir.com/20221125164002212810517888_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. Meituan has 687.1 million Annual Transacting Users and 9.3 million Annual Active Merchants as of September 30, 2022. 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

Edmond Lococo
ICR Inc.
Email: Edmond.Lococo@icrinc.com
Tel: +86 138-1079-1408

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SOURCE Meituan

FAQ

What were Meituan's Q3 2022 earnings results?

Meituan reported earnings of RMB62.6 billion in revenue, with an adjusted net profit of RMB3.5 billion.

How much did Meituan's revenue increase in Q3 2022?

Meituan's revenue increased by 28.2% YoY in Q3 2022.

What is the stock symbol for Meituan?

Meituan's stock symbol is MPNGY.

What were the operating profits for Meituan's segments in Q3 2022?

Core local commerce operating profit was RMB9.3 billion, while New initiatives segment operated at a loss of RMB6.8 billion.

What is the future outlook for Meituan following the Q3 2022 results?

Meituan aims to continue its growth trajectory through its 'Retail + Technology' strategy, focusing on digital transformation and enhancing core capabilities.