Meituan-Dianping plans to tap new delivery channels after booking $1.27b loss in 2018

Mobike dragged the company down.

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The world’s largest food delivery service provider Meituan-Dianping reported a total revenue of RMB 65.2 billion (US$9.7 billion) in 2018, up 92.3% year-on-year, according to the company’s latest filing with the Stock Exchange of Hong Kong.

Despite the strong revenue growth, the company booked an adjusted net loss of RMB 8.5 billion (US$1.27 billion).

Meituan acquired bike-sharing company Mobike in April 2018. That acquisition generated RMB 1.51 billion (US$225 million) in revenue in the 2018 fiscal year. Mobike contributed to more than half of Meituan’s losses, at RMB 4.55 billion (US$678 million).

Revenue from food delivery, which is Meituan’s core business, increased by 81.4% year-on-year to RMB 38.1 billion (US$5.67 billion). Likewise, revenue from in-store, hotel, and travel businesses increased by 46% to RMB 15.8 billion (US$2.35 billion) in 2018.

“We will improve the operational efficiencies and significantly narrow the operating losses of both our car-hailing and bike-sharing businesses, and strengthen their strategic synergies with the overall platform,” said Meituan in the filing.

Meituan added that the company will prudently explore the opportunities in new areas, such as delivering merchandise, after promising to take a more disciplined approach when allocating capital resources for new initiatives.

The company closed at HK$52.35 (US$6.7) per share, down by 11.12% compared with the previous trading day.