(Yicai Global) March 12 -- Meituan Dianping's stock price fell by the maximum after the operator of China's so-called super app reported disappointing financial results.
Shares in Meituan Dianping [HKG:3690], formed by the merger of China's two biggest lifestyle service providers in 2015, ended 11 percent lower today at HKD52.35 (USD6.67).
Its net loss nearly tripled to CNY11.1 billion (USD1.7 billion) in 2018 from a year earlier despite revenue almost doubling to CNY65.2 billion, the Beijing-based company said in an earnings report yesterday.
Last April, the company paid USD2.7 billion for bike-sharer Mobike, adding to its vast array of on-demand online services, and raised USD4.2 billion in an initial public offering in Hong Kong last September. But costs have spiraled, while growth in food and hospitality services has not delivered enough ammunition to fend off rival Alibaba Group Holding.
In the April to December period, the company's loss was CNY4.6 billion on operating income of CNY1.5 billion.
Meituan Dianping, which is backed by Tencent Holdings, plans to restructure to focus on its competitive core business, and be more cautious when it comes to new investments, the report shows. Headed by billionaire Chief Executive Wang Xing, the firm also aims to boost operational efficiency at its car-hailing and bike-sharing businesses. It will withdraw Mobike, China's biggest bike-sharer, from most overseas markets.
By the end of December, Meituan Dianping had increased the number of its users by nearly 30 percent to 400 million. Gross merchandise volume was CNY515.6 billion.
Revenue from its food delivery business rose 81 percent to CNY38.1 billion. The related gross profit was CNY5.3 billion. Operating income at its travel and hotel bookings business was CNY15.8 billion, a 46 percent gain. Gross profit was CNY14.1 billion. New business revenues jumped over four-fold to CNY11.24 billion.
Meituan Dianping's shares have lost more than a quarter of their value since the company went public.
Editors: William Clegg, Emmi Laine