Meituan Gains $88 Million From Investment in Li Auto
What’s new: Chinese food delivery giant Meituan Monday reported better-than-expected third-quarter revenue and profit, boosted by investment gains from the initial public offering of Chinese electric car maker Li Auto Inc.
Meituan, whose services include restaurant reviews and bike sharing, said revenue rose 28.8% in the third quarter to 35.4 billion yuan ($5.38 billion), beating analysts’ average estimate of 34 billion yuan. Net income more than tripled to 6.7 billion yuan, bolstered by 5.8 billion yuan in investment gains.
Excluding investment gains, stock-based compensation and intangible assets amortization, the company’s adjusted net profit increased 5.8% to 2.06 billion yuan.
The background: Meituan through a subsidiary holds a 16.1% stake in Li Auto, which went public on Nasdaq in July. Li Auto’s stock price has more than tripled since the IPO.
Meituan and competitors are facing increasing regulation aiming to prevent anticompetitive practices by internet platforms. Draft rules issued earlier this month by the State Administration of Market Regulation make clear that internet platforms should not abuse dominant positions to force merchants to choose between platforms.
In August, Alibaba-owned food delivery service Ele.me accused rival Meituan of telling restaurants that to appear on the Meituan app businesses would have to end any collaboration with Ele.me.
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