By Tracy Qu

Chinese food-delivery giant Meituan reported a near doubling in profit on better-than-expected revenue growth in the first quarter, continuing a run of strong earnings despite fierce competition at home.

The Beijing-based shopping-and-delivery platform said Monday that net profit was 10.06 billion yuan for the first three months of the year, equivalent to $1.40 billion. The result was significantly higher than the 5.37 billion yuan reported a year earlier and the 7.93 billion yuan expected of analysts polled by FactSet.

Revenue jumped 18% to 86.56 billion yuan, topping analysts' estimate of 85.4 billion yuan. Quarterly revenue from Meituan's core local commerce segment rose by the same percentage to 64.32 billion yuan, the company said.

The consensus-beating figures point to the resilience of Meituan, a dominant player in the Chinese food-delivery market, even as it faces stiff competition in its home market from the likes of Alibaba Group and JD.com, which have ramped up efforts to grow their rival services. Beijing-based JD.com recently announced plans to hire 100,000 full-time food-delivery riders.

While the intense rivalry in the sector has yet to make a dent in Meituan's results, analysts at Citi said it will likely force China's leading food-delivery platform to step up subsidies for users, riders and merchants and accelerate the rollout of rider benefits, which may eventually weigh on the company's revenue growth.

Amid the competition, Meituan has been looking to expand overseas to bolster growth. The company plans to invest $1 billion to launch its Keeta food-delivery service in Brazil, looking to replicate its success in Saudi Arabia and Hong Kong with its first foray into South America.

The company's new initiatives segment grew revenue by 19% and narrowed its operating loss to 2.3 billion yuan.

Another potential headwind for Meituan lies in China's regulation of platform fees.

China's antitrust regulator released draft guidelines over the weekend asking online platform operators to charge reasonable, transparent fees to third-party merchants.

The goal of the regulation seems to be to improve the operational environment for businesses that sell on delivery and e-commerce platforms and increase merchants' income, Citi analysts led by Alicia Yap said in a note.

Given that most platforms already have various fee-waiver programs in place, as well as merchant support subsidies, they don't think the new rules would require operators to make major changes. Still, the regulations could weigh on monetization over time, they said, viewing Meituan as among the platforms most likely to be affected.

The news sent Meituan's Hong Kong-listed shares tumbling as much as 6.4% on Monday. The stock has declined about 15% so far this year, underperforming its peers and the broader market by a sizable margin.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

May 26, 2025 06:16 ET (10:16 GMT)

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