On Sept. 20, Meituan-Dianping started trading at the Hong Kong Stock Exchange. According to Chinese media 36Kr, Wang Xing, CEO of Meituan, expressed his sincere gratitude for the 340 million users, 4.7 million business owners using the platform, 600,000 deliverymen, and all its previous and present investors on the exciting occasion.
Shares of Meituan-Dianping jumped as much as 7 percent in the morning trading session and ended the trading day up 5 percent.
According to the IPO prospectus of the company, the underwriters of Meituan-Dianping are Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch.
In his speech, Wang delivered his special thanks to Steve Jobs, founder of Apple, saying that, “Without the invention of smartphones and the Internet, Meituan would not be here today”, Wang said.
Meituan’s share started trading at 69 HKD ($8.8). If calculated by the total stock issuance of 5.491 billion, its valuation will reach $48.3 billion, even exceeding that of Xiaomi, which had just gone public this July. Should the trend continue to rise, the company will be well on its way to become the fourth tech giant in China following the powerhouses of BAT.
According to Reuters, Meituan also filed for the Hong Kong listing with a dual-class share structure just like Xiaomi did, under the city’s new rules designed to attract tech companies.
It is also shown in the IPO Prospectus that from 2015 to 2017 Meituan’s operating revenue totaled 4 billion yuan (about $509 million), 13 billion yuan (about $1.66 billion), and 33.9 billion yuan (about $4.32 billion), accounting for a year-on-year increase of 223.2 percent and 161.2 percent respectively. The revenue has grown by over seven times throughout the past three years.
However, despite the incredible growth rate, Meituan is not making a profit. From 2015 to 2017, its total losses incurred were 10.5 billion yuan ($1.33 billion), 5.8 billion yuan ($739 million), and 19 billion yuan ($2.42 billion) respectively. In the first four months of 2018, Meituan suffered a total loss of 22.795 billion yuan, a three-fold increase compared to the same period last year.
Under the leadership of Wang, Meituan now finds itself in a cash-burning operation on three different fronts, namely food delivery, ride-hailing, and bike-sharing. Meituan acquired Mobike, a Chinese bike-sharing platform, this April and becomes one of the two biggest players in bike-sharing. However, the company also stated in the prospectus that Mobike has incurred losses ever since its founding and it could not guarantee profitability both for Mobike and the parent company at this moment.