(Yicai) Nov. 29 -- Meituan’s shares tumbled after the Chinese company said it expects fourth-quarter revenue growth at its main food delivery business to slow from last quarter and will spend more on marketing to counter competition.

Meituan [HKG: 3690] finished 12.2 percent down at HKD90.45 (USD11.59) in Hong Kong today, bringing the stock’s decline so far this year to 48 percent. It plans to buy back as much as USD1 billion of its own shares starting Dec. 1, the Beijing-based company confirmed today.

Meal deliveries are also likely to drop in the three months ending Dec. 31 compared with the same period a year ago, said Chief Financial Officer Chen Shaohui, who added that the on-demand services giant’s marketing will get a boost.

“Raising our marketing expenses will not only help us in the current competitive environment but also bring us long-term profit and growth,” founder and Chief Executive Wang Xing said, adding that outlays will rise this quarter as Meituan focuses on livestreaming to tackle rivals.

At the end of last month, Meituan launched its own short video business Meituan Video to compete with Douyin and Kuaishou, hoping to increase sales through clips and livestreaming. Meituan's official livestreaming events expanded to more than 200 cities in the third quarter, according to its third-quarter earnings report published yesterday.

Douyin, TikTok’s sister app, said last month that it would invest CNY500 million (USD70.7 million) in the upcoming year to encourage and fund influencers to promote local stores. Douyin is expected to have in-store gross merchandise volume of CNY300 billion (USD42.5 billion) in 2025, about half that of Meituan, according to a report by Guosheng Securities.

Kuaishou, Xiaohongshu, and WeChat Channels also invested heavily in local life services this year.

Third-Quarter Earnings

Meituan’s net profit tripled to CNY3.6 billion (USD509.2 million) in the three months ended Sept. 30 from a year ago, its trading report showed. Operating revenue jumped by a better-than-expected 22 percent to CNY76.5 billion (USD10.8 billion).

“During the quarter, our businesses delivered resilient growth, setting new records across multiple performance metrics,” Chen said. “Our confidence in the long-term potential of our core business remains intact.”

Operating revenue from core local services, such as meal takeaways, hotel bookings, homestays, and transport tickets, soared 25 percent to CNY57.7 billion in the period, while operating profit rose 8.3 percent to CNY10.1 billion.

Meanwhile, operating revenue from new businesses, including the commodity retail and self-operated ride-hailing businesses, jumped 15 percent to CNY18.8 billion. The operating loss at its new businesses shrank 25 percent to CNY5.1 billion.

Editor: Futura Costaglione