Meituan Dianping projected losses and a revenue drop this quarter but warned of uncertainty over the course of 2020, joining fellow tech giants around the world now struggling to come to grips with the economic and logistical shocks from Covid-19, reported Caixin.
Backed by Tencent Holdings, the food delivery and internet services giant is one of the most exposed of China’s major tech companies to the spread of Covid-19. Many restaurants in its home country either shut or reduced operating hours during the outbreak, while widespread travel restrictions crippled its hotel-booking and ride-sharing businesses. The company’s outlook is further clouded by China’s worsening economy, which may contract this quarter for the first time since 1989, denting consumer spending.
Meituan joins sector bellwethers from Sony to Apple to Twitter that have emphasized the difficulty of parsing such an unprecedented event as the coronavirus pandemic. The Chinese company projected that revenue will decline year-over-year in the March quarter but said it couldn’t fully determine the extent to which the coronavirus pandemic will hurt its operations in 2020.
“The pandemic has already caused severe disruptions to the daily operations of our merchants, including restaurants, local services merchants and hotels, which in turn resulted in downward pressure on our own operations for the first quarter of 2020,” Meituan said in its filing. “Due to the high uncertainty of the evolving situation, we are unable to fully ascertain the expected impact on full year 2020 at this stage.”