Meituan shares surge as much as 14% after earnings report

[SINGAPORE] Shares of Chinese food delivery giant Meituan surged as much as 14 per cent in Hong Kong after its fourth-quarter results impressed analysts.

The stock snapped a 2-day loss and was the best performer on the Hang Seng Tech Index on Monday (Mar 28). The firm reported a net loss of 5.3 billion yuan (S$1.1 billion) for the December quarter, versus the 7.2 billion yuan projected by analysts. Revenue rose 31 per cent - the slowest in more than a year - to 49.5 billion yuan, meeting estimates.

Meituan is one of the Chinese technology giants that are navigating a severe regulatory crackdown from authorities in Beijing. The company, led by high-profile billionaire Wang Xing, is grappling with scrutiny in areas from the welfare of its delivery riders to the commissions it charges restaurants.

Meituan and its rivals are also under pressure to do their bit to share the wealth in Xi Jinping's "common prosperity" drive, and alleviate widespread pain as China battles several Covid outbreaks. In February, the government issued a call to aid the ailing service industry, asking food delivery platforms to cut the fees they charge restaurants - wiping US$26 billion off Meituan's value in a single day.

Meituan's stock had dropped 40 per cent this year before Monday. BLOOMBERG