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Chinese Food Delivery Giant Meituan Shares Increased By 15% In The Last Quarter

Meituan is a Chinese tech giant which is currently navigating through a massive regulatory crackdown from Beijing authorities.

Meituan Shares Increased By 15% In The Last Quarter

Chinese food delivery behemoth Meituan shares increased by 15% in Hong Kong after the declaration of its fourth-quarter results, impressing trade analysts. There was a 2 day loss period after which the stock soared, and became the best performer on Monday on the Hang Seng Tech Index. 

Meituan reported net losses of $831 million for the quarter ending December, in comparison to the 7.2 billion Yuan as analysts were predicting. Revenues rose by 31% which was the lowest and slowest for the year to 49.5 billion Yuan which met the estimates of trade analysts. 

Meituan is a Chinese tech giant which is currently navigating through a massive regulatory crackdown from Beijing authorities. Wang Xing, a high-profile billionaire leads the company which is facing scrutiny in such areas as delivery rider welfare and surge in commissions from restaurants. 

Meituan as well as its rivals face pressure from Xi Jinping’s “common prosperity drive” which is an initiative for wealth sharing amidst the bleak scenario of severe COVID outbreaks in the country. The common prosperity drive is supposed to bring down the pain of the people who are grappling with lockdowns and loss of jobs. 

Back in February, the government asked for aid to the suffering service industry by asking food delivery giants to cut the commission that they charge from restaurants. This announcement wiped off 26 billion USD from Meituan’s value in the space of a single day.

The company looks to improve profitability by reducing the financial incentives it provides to its users, however unpalatable that may sound. 

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