Shares of Meituan Dianping, the Chinese food delivery and lifestyle platform, surged more than 8% on Friday after the company posted a second consecutive quarterly profit on Thursday.

Why it matters: The profits further boosted market confidence in the Chinese super app, which has unseated Baidu as the third-largest publicly held Chinese internet company after Alibaba and Tencent.

“With our ‘Food + Platform’ strategy, we will continue to leverage our insights on the consumers and merchants to further boost innovation and improve efficiency. As always, we will keep investing in our long-term growth and focusing on business opportunities that will generate value for both consumers and merchants in the long run.”

–Xing Wang, Meituan chairman and CEO, in a statement

Details: The company’s total revenues increased 44.1% year over year to RMB 27.5 billion (around $3.91 billion) in Q3 this year from RMB 19.1 billion for the same period of 2018. Revenues increased across all business segments, according to the company.

  • Revenue from food delivery, which accounts for 56.7% of the total, increased 39.4% to RMB 15.6 billion in Q3 from RMB 11.2 billion for the same period in 2018, primarily driven by higher average purchase frequency and increase in average value per order.
  • The company reported RMB 1.33 billion in profit during the period against analyst estimates of RMB 502 million in losses, according to data cited by Bloomberg.
  • Selling and marketing expenses as a percentage of total revenues decreased to 20.4% from 24.2% for the same period of 2018, and increased from 18.3% for Q2 2019.
  • Revenue contribution from newer businesses such as bike rental and on-demand grocery delivery service Meituan Instashopping increased to 20.8% in Q3 from 18.1% in the same period a year ago.

Context: Meituan went public on the Hong Kong stock exchange in September 2018, raising $4.2 billion.

  • The company’s market cap hit a historical high in October of HK$500 billion ($71 billion), boosted by consumption demands during the seven-day national holiday.

Meituan shares hit historical high after Golden Week surge

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at More by Emma Lee

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