Meituan Dianping ((HK:3690)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Meituan Dianping presented a balanced outlook, highlighting significant achievements in revenue growth, expansion, and technological advancements. However, the company acknowledged challenges in specific segments, such as order volume growth and cost management for new initiatives, indicating a mixed sentiment overall.
Record Revenue Growth
The company reported a remarkable 22% year-over-year increase in total revenue for the full year of 2024, reaching RMB337.6 billion. This record growth underscores Meituan’s robust performance and its ability to capitalize on market opportunities.
Significant Increase in Active Merchants and Users
Meituan saw a notable rise in its user and merchant base, with annual transacting users exceeding 7.70 million and active merchants growing to 14.5 million. This expansion reflects the company’s successful strategies in attracting and retaining a diverse range of stakeholders.
Expansion into Overseas Markets
The launch of Keeta in Saudi Arabia marked Meituan’s strategic entry into overseas markets, with operations expanding rapidly across major cities. This move highlights the company’s ambition to establish a global footprint.
Advancements in Autonomous Delivery
By the end of 2024, Meituan had fulfilled 4.9 million commercial orders using autonomous vehicles and 1.45 million with drones. These advancements demonstrate the company’s commitment to leveraging technology for operational efficiency.
Strong Financial Performance
Meituan’s total segment operating profit surged to RMB10.7 billion, up from RMB3.2 billion the previous year, with an adjusted net profit of RMB9.8 billion. This strong financial performance is indicative of improved operating leverage and efficiency.
Innovations in On-Demand Delivery
The introduction of Pin Hao Fan and branded satellite stores has enhanced Meituan’s food delivery options and efficiency, showcasing the company’s innovative approach to meeting consumer demands.
Softer Order Volume Growth
Order volume growth for food delivery and certain non-food categories was softer compared to Q3 2024, attributed to warmer weather and earlier returns to lower-tier cities. This indicates potential seasonal challenges affecting demand.
Increased Costs for New Initiatives
The operating loss for new initiatives expanded quarter-over-quarter due to investments in overseas business and unfavorable seasonality for bike sharing and power bank services, highlighting the cost challenges associated with new ventures.
Challenges in Meituan Select
Significant strategic adjustments were made to improve efficiency in Meituan Select, but the supply chain transformation will take time to reflect in the P&L, indicating ongoing challenges in this segment.
Forward-Looking Guidance
Meituan provided comprehensive guidance for the upcoming year, emphasizing continued revenue growth and technological advancements. The company plans to focus on expanding its Meituan Instashopping service and furthering its overseas market presence, particularly in Saudi Arabia. Strategic investments in AI and autonomous delivery technologies, along with initiatives to enhance merchant support and courier welfare, are expected to drive future growth.
In summary, Meituan Dianping’s earnings call reflected a balanced sentiment, with significant achievements in revenue growth and technological advancements, despite facing challenges in certain segments. The company’s strategic focus on expansion and innovation positions it well for future growth, making it a compelling entity in the financial markets.