By Gina Lee

Investing.com – Chinese food delivery provider Meituan (HK:) impressed in its results for the fourth quarter of 2021, reporting a net loss of CNY 5.3 billion ($832.38 million) versus the CNY7.2 billion forecast by analysts. CNY49.5 billion saw a 31% increase in revenue, which was the slowest growth rate for more than one year. However, it exceeded analysts’ estimates.

The company’s Hong Kong shares soared 14% to HK$153.9 ($19.66) by 1:25 AM ET (5:25 AM GMT). Stocks recovered from a 2-day decline to be the top performer in the Tech Index’s Monday index.

Meituan, one of China’s technology titans is under scrutiny for everything from its welfare riders to how it charges restaurants. It is also under pressure to share its wealth as part of Chinese President Xi Jinping’s “common prosperity” drive, with the country facing its latest COVID-19 outbreak.

The government in February issued a call to aid the service industry, asking food delivery platforms to cut the fees they charge restaurants and wiping $26 billion off Meituan’s value in a single day. Shanghai, China also appeared earlier than usual.

“Meituan’s fourth-quarter boost in food-delivery margin from a persistent increase in transactions could alleviate concerns about the drag from government-initiated fee cuts, meant to provide relief to merchants amid Covid-19 flare-up, to the unit’s first-half profitability. The company needs to raise first half transaction volume by at least 14% to yield more cost savings, we calculate, while lifting food-delivery margin above the year-earlier level following fee adjustments,” according to Bloomberg analysts Catherine Lim and Tiffany Tam.