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April 1, 2020

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Home » Sunday » Technology

Meituan forecasts Q1 loss as virus hits

By Ding Yining | 00:00 UTC+8 April 1, 2020 | Print Edition

Lifestyle services platform Meituan Dianping expects a net loss in the first quarter after returning to profit in the fourth quarter last year, due to “severe disruptions” to restaurants and offline merchants amid the coronavirus pandemic.

The company’s operating profit in the fourth quarter was 1.5 billion yuan (US$211 million) thanks to a 42 percent annual increase in revenue to 28 billion yuan.

“Business segments such as food delivery and in-store, hotel and travel are all facing significant challenges on the demand and supply sides,” the company said in an earnings statement.

Hong Kong-listed Meituan Dianping opened up 10 percent and closed 6.53 percent higher at HK$93.75 (US$12.08) yesterday, although it said the impact on its travel and ride-sharing businesses remains uncertain.

Operating profit for 2019 also turned positive for the first time at 2.7 billion yuan, with revenues surging 49 percent to 97.5 billion yuan.

BoCom International said it expects Meituan’s revenue to fall 16 percent in the first quarter to 16 billion yuan, with in-store and hotel business suffering the greatest hit with a 35 percent decline.

It will take time to build consumption confidence especially for discretionary spending, said Meituan’s Chief Financial Officer Chen Shaohui.

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