China food delivery giant Meituan posts fourth straight quarterly loss

A Meituan delivery worker wearing a face mask, following the outbreak of the coronavirus disease (COVID-19), has his temperature checked as he enters a shopping complex, in Beijing, China July 15, 2020. REUTERS/Tingshu Wang/File Photo

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SHANGHAI, Nov 26 (Reuters) – Chinese food delivery giant Meituan (3690.HK) reported a fourth consecutive quarterly loss on Friday, as it plowed more investment into expanding its various businesses.

Tencent-backed (0700.HK) Meituan, whose services also include restaurant reviews and bike sharing, reported a 10 billion yuan ($1.57 billion) loss in the July-September period versus a profit of 6.3 billion yuan a year earlier.

Excluding one-off items, it reported an adjusted net loss of 5.5 billion yuan for the quarter, compared with analysts’ estimate of 5.3 billion yuan.

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Revenue rose 37.9% in the period from a year earlier to 48.8 billion yuan.

That compared with a 48.6 billion yuan average of 13 analyst estimates polled by Refinitiv.

The 11-year-old Meituan has been expanding aggressively into hotel booking and community group-buying, taking on such rivals as Alibaba (9988.HK) and Pinduoduo (PDD.O).

Food delivery, the company’s core business, posted quarterly revenue growth of 28% to 26.5 billion yuan.

Revenue from new initiatives, including its community group-buying service, Meituan Select, grew by 66.7% year-on-year to 13.7 billion yuan.

Like many of its Chinese tech peers, it has run into regulatory hurdles over the past year, as Chinese authorities crack down on monopolistic behavior.

In October, the country’s antitrust regulator fined Meituan 3.4 billion yuan ($527.4 million) for abusing its dominant market position, equating to 3% of its domestic sales in 2020. read more

Meituan has also faced criticism for its treatment of delivery riders, most of whom are not covered for basic social and medical insurance. The company said in its statement that it had launched an occupational injury protection pilot program and planned to roll out more welfare initiatives.

($1 = 6.3888 Chinese yuan renminbi)

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Reporting by Brenda Goh; Editing by Edmund Blair and Kim Coghill

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