Chinese food delivery giant Meituan Dianping has beaten market expectations to record a 44% jump in third-quarter revenue and post a second straight quarterly profit as it gained market share and cemented its dominance in the business.
Competition in China's food delivery sector has become less cut-throat as companies roll back profit-damaging subsidies, which in turn has allowed Meituan to capitalise on its first-mover advantage over rivals in the country's smaller cities.
According to research firm Trustdata, Meituan has steadily increased its share of China's food delivery market to 65.8% as of the end of September, compared with 60.1% a year earlier.
Revenue for Meituan, which is China's third-biggest internet company by market value and is backed by gaming giant Tencent Holdings Ltd, came in at 27.49 billion yuan ($3.5 billion) for the July-September quarter, up from 19.1 billion yuan in the same period a year earlier.
That compares with a market consensus estimate of 25.92 billion yuan drawn from 11 analysts, according to Refinitiv I/B/E/S data.
It booked a profit of 1.33 billion yuan, its second consecutive quarter of profit since listing last September.
"The two consecutive quarters of profitability gives investors more confidence on the food delivery business model," said David Dai, an analyst at Bernstein Research.
Meituan's food delivery division, which is its core business, reported revenue of 15.58 billion yuan in the quarter, a 39.4% increase from a year earlier.
Gross Transaction Volumes And Company Value
Meituan said that gross transaction volumes for the quarter rose by 33.6% to 194.6 billion yuan, while the annual number of transacting users climbed 14% to 435.8 million.
Valued at some $72 billion, Meituan operates one of China's most popular super apps, also offering travel bookings, restaurant recommendations, movie tickets, bike sharing and map services.
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