©Reuters
Investing.com– Shares of Chinese food delivery app Meituan (HK:) rose sharply on Monday, posting better-than-expected earnings as the company staved off a broader slowdown in China’s economy and consumer spending.
Meituan shares in Hong Kong jumped 8.1% to a four-month high of HK$95.35, supporting a 0.4% rise in the broader index.
The company posted revenue of 73.7 billion yuan ($10 billion) in the quarter ended Dec. 31, and also returned to profit from a loss a year ago.
Earnings at the company, which offers services including quick groceries, ride sharing and maps, were boosted by a growing push into Hong Kong markets. Meituan had set up a new food delivery unit in Hong Kong last year, expanding its reach from mainland markets.
But Meituan’s local market has benefited from China’s reopening, with the company’s core delivery services business posting strong growth as demand rebounded from 2022 lows. Meituan’s 2022 earnings were held back by China’s strict anti-COVID measures, which were only lifted in early 2023.
A recovery in demand for travel and leisure has also seen hotel bookings on its platform increase by 100% through 2023.
However, China’s economy is grappling with a prolonged decline in consumer spending and business activity. Weak spending has also seen the country slide into deflationary territory at the end of 2023, with consistent monetary stimulus measures doing little to relieve this pressure.