Meituan - Profitable Finally?

They are actually one of the world's first pioneers in online and on-demand food delivery as a service.

Their core market is China, and their model actually inspired other companies to start similar services in other regions.

Its recent quarter saw the company coming into the black. What happened and what entails for the company?

Meituan's revenue grew 26.7% YoY. Its core local commerce segment achieved an operating profit of RMB 9.4 billion for Q1'23, up by 100.7% from the same period in 2022.

Operating losses of New initiatives narrowed to minimize the drawdown.

As China reopen and recover from the pandemic, so did the overall food delivery business as well.

On top of the food delivery business returning to normal, Instashopping is also helping drive deliveries by offering channels for users to shop and get their goods delivered by Meituan.

High-growth tech companies tend to see their operating expenses ballooning as they grow.

Meituan's latest Q1'23 expenses remained relatively flat. Thus, on top of higher revenue, its gross margins went up to 33.81% and that helped it to achieve profitability for this quarter.

DISCLAIMER
The information available in this article/report/analysis is for sharing and education purposes only. This is neither a recommendation to purchase or sell any of the shares, securities, or other instruments mentioned; nor can it be treated as professional advice to buy, sell or take a position in any shares, securities, or other instruments. If you need specific investment advice, please consult the relevant professional investment advice and/or for study or research only.