Meituan CEO Wang Xing Cuts Holdings in Li Auto
According to a document from the Hong Kong Stock Exchange, Wang Xing, who is the co-founder and CEO of Meituan, a Chinese food delivery company, sold 1.33 million shares of Li Auto over three trading days (March 28-30). The average price per share was HKD93.2, HKD97.8 and HKD97.7 respectively. He cashed out a total of HKD128 million through this sale. Following this transaction, his stake in Li Auto decreased from 22.42% to 22.35%. However, he still remains the largest external shareholder of the automaker.
Between March 20 and March 23, Wang carried out six reductions, which included three reductions in Li Auto‘s ADRs. The total amount of these reductions was approximately 14.07 million. Along with the three reductions made last week, Wang has now cashed in a total of HKD 420 million.
After Wang’s move generated a lot of attention, Li Auto responded that it was a personal move by Wang, representing a very small percentage of his stake in Li Auto and not involving Meituan‘s holdings.
Wang was among the first supporters of Li Auto. In August 2019, Li Auto declared that it had successfully raised $530 million in a round C financing, with Wang serving as the primary investor by contributing $300 million personally. Later on, in June 2020, Li Auto secured a round D financing worth $550 million, where Meituan led with an investment of $500 million. The post-investment valuation stood at $4.05 billion.
During the listing process of Li Auto on Nadaq in the United States, Meituan $300 million and Wang personally subscribed $30 million.
Wang has frequently cheered for Li Auto. In October of last year, he even exclaimed, “For the past two or three decades, the leaders in China’s high-end car market have always been Mercedes-Benz, BMW and Audi. The next two to three years will depend on Li Auto, NIO and Huawei. No matter who wins, China will win.”
Li Auto‘s delivery performance has been lackluster since last year, with a consistent output of around 10,000 vehicles. In August of last year, the company delivered only 4,571 vehicles. However, Li Auto‘s fortunes have improved significantly in March of this year when it reported delivering a total of 20,823 new cars – an impressive YoY growth rate of 88.7%.
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Li Auto‘s Hong Kong stock price hit a peak of HKD 165.3 per share in June of last year, following its listing, and boasted a market value of HKD 344.65 billion. However, by the end of October of that same year, its stock price had plummeted to just HKD 52.05 per share and its market value had shrunk to HKD 108.524 billion. Currently trading at HKD 93.95 per share, Li Auto‘s market value has since recovered somewhat to reach HKD 195.8 billion.
