China's Dingdong Q3 net income jumps 260% on asset accounting change

Overview

• Chinese fresh grocery e-commerce firm's Q3 revenue rose 10.8% yr/yr

• Q3 net income increased 259.6% yr/yr, aided by cessation of depreciation for held-for-sale assets

• Company's China business pending sale to Meituan, with transaction awaiting regulatory approval

Outlook

• Company did not provide specific guidance for upcoming quarters or the full year in its press release

Result Drivers

• ORDER GROWTH - Co said higher average monthly transacting users and increased order frequency drove revenue growth in China

• FULFILLMENT NETWORK - Densification and new openings of frontline fulfillment stations in Eastern China contributed to core market growth

• ASSET ACCOUNTING IMPACT - Net income increased due to cessation of depreciation and amortization for held-for-sale China business assets

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "buy"

• The stock recently traded at 5 times the next 12-month earnings vs. a P/E of 8 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)