FAST NEWS: Meituan repurchases 83.85 million shares
The Latest: Meituan (3690.HK) announced Wednesday that it repurchased 4.21 million shares on July 17 at prices ranging from HK$116.20 to HK$120, with a total value of HK$500 million ($64 million).
Looking Up: The company has bought back about 83.86 million shares since its repurchase plan was authorized on June 14, representing about 1.34% of its share capital
Take Note: The repurchasing of shares may draw away internal funds from other uses such as for operations and future investments.
Digging Deeper: Meituan entered a new cash-burning phase with the launch of its community group-buying and grocery businesses in 2020. That pushed it into the red with combined losses of more than 30 billion yuan in 2021 and 2022, as losses from the newer businesses offset profits for its older food delivery and in-store, hotel and travel services businesses. Performance of its new businesses has started to improve more recently, with their operating loss down by nearly 30% last year to 20.2 billion yuan. Its revenue continued to rise by 18.5% to 18.7 billion yuan in this year’s first quarter, while its operating loss narrowed 45.2% to 2.8 billion yuan.
Market Reaction: Meituan shares initially fell before rising on Thursday morning and closed up 0.3% at HK$119.50 by the midday break. The stock now trades in the middle of its 52-week range.
Translation by A. Au
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