Food delivery application ‘fluttering’ thanks to Covid-19: Market capitalization exceeded $ 100 billion for the first time, CEO’s assets doubled in a few months

Meituan Dianping, the founder of delivery application, Wang Xing, has seen his fortune nearly double since the company’s business boomed thanks to a blockade ordered by China’s Covid-19. Wang Xing currently has a solid position in the generation of the most potential technology entrepreneurs in the country.

Meituan shares jumped 10.4% yesterday after publishing better-than-expected business results, pushing the company’s market value to exceed $ 100 billion for the first time in history.

In addition, based on the 11.3% stake in the company that Wang Xing holds, his total assets now exceed $ 10.3 billion.

Invested by Tencent, the service that Meituan provides ranges from food delivery to hotel booking, making it one of the potential startups to compete with both Alibaba and Tencent itself. Meituan’s Covid-19, the most vulnerable business activity for hotel reservations, also showed signs of recovery in April and May. By the end of March, more than 70% of the surveyed restaurants had recovered. recovered more than half of regular orders, while 30% said they had exceeded pre-pandemic levels.

Wang believes in investments and expansion strategies that can turn startups like Groupon-like services into food delivery giants and more. As a former computer engineer, Wang is trying to maintain Meituan’s position among China’s tech giants. He himself is part of a new generation of entrepreneurs, along with billionaires like Zhang Yiming of ByteDance and Cheng Wei of Didi Chuxing.

“In the next three quarters, we believe there will still be challenges emerging due to the uncertainty and potential for recession if Covid-19 continues to evolve complicatedly. Not to mention, the majority of traders Local businesses are still struggling to survive. Short-term profitability is a top priority, “Wang said at the earnings announcement.

Meituan shares rallied after they reported better-than-expected revenue of 16.8 billion yuan ($ 2.4 billion) in the first three months of the year.

“Covid-19 had a negative impact on Meituan but the business results showed a wide profit margin. In the food delivery sector, the long-term potential is still there and the level of profitability can be higher after promotion companies “.

In the long run, the internet service giant will have to deal with China’s weakened economy. Subsidies and measures to help restaurants and vendors in the epidemic will put pressure on profits in the second quarter of the year. Meituan reported an estimated-than-expected loss of 1.58 billion yuan but after three consecutive quarters of profit.

Before the arrival of Covid-19, meituan pushed into related fields from online travel to car hire. When hotel and tourism business revenues fell 31% in the first quarter, smaller new areas such as car and bicycle hiring saw an increase of 4.9%. They have also just launched a vegetable delivery service. Hotels are still having difficulty: In the week 11/5, the number of nights in domestic hotel rooms was only 70% of the previous rates.

While Meituan is expanding its offering to sell everything like headsets and agricultural products, it competes with Ant and SF Express. the food delivery business itself also faces fierce competition from Ele.me – a startup invested by Alibaba.