Meituan's AI investments offset quarterly loss with US$1b windfall
In the first quarter of 2023, Meituan experienced an adjusted net loss of 4.97 billion yuan (US$735 million), marking its third consecutive quarter of losses. However, the company revealed a significant investment gain of 7.6 billion yuan from its stake in AI company Zhipu (Z.ai). This profit, classified as fair value through other comprehensive income, is attributed to Meituan's 3.86% ownership in Zhipu, which boasts a market capitalization of 629.5 billion yuan. This equates to 24.3 billion yuan in financial benefits, helping to alleviate pressure on core business margins from competitors like Alibaba and JD.com. On Tuesday, Meituan's shares surged over 9% to reach HK$85.50.
Key facts
- Meituan posted an adjusted net loss of 4.97 billion yuan (US$735 million) for Q1 2023.
- This marks Meituan's third consecutive quarterly loss.
- Meituan disclosed a 7.6 billion yuan gain from investments in AI firm Zhipu.
- The gain was recorded as fair value through other comprehensive income.
- Meituan holds a 3.86% stake in Zhipu (Z.ai).
- Zhipu's market capitalization was 629.5 billion yuan on Tuesday.
- Meituan's equity interest in Zhipu translates to 24.3 billion yuan in financial gains.
- Meituan shares jumped over 9% to HK$85.50 on Tuesday.
Entities
Institutions
- Meituan
- Alibaba Group Holding
- JD.com
- Zhipu
- Z.ai
Locations
- Hong Kong