On May 10, the Hong Kong share price of the mainland shopping platform Meituan fell from its opening price of HK$280 per share all the way to its lowest price of HK$255 per share, a drop of nearly 9%, and its market value evaporated by more than HK$100 billion. Ever since Meituan was investigated by the authorities for anti-monopoly, its share price has been going down.
From the fall on April 28 to May 10, Meituan’s share price has experienced nine consecutive drops. Since the beginning of this year, Meituan’s share price has fallen 44% from its peak this year.
According to mainland media reports, Meituan’s fourth-quarter 2020 earnings report released in March this year showed a loss of 2.85 billion yuan in the fourth quarter.
Meituan, a well-known takeaway platform on the mainland with businesses in the fields of catering, taxi, bike-sharing, hotel tourism and leisure and entertainment, was listed in Hong Kong on Sept. 20, 2018. on Aug. 24, 2020, Meituan’s market capitalization reached about HK$1.56 trillion, while becoming the fourth largest company in Hong Kong in terms of market capitalization, after Tencent, Ali and ICBC.
Some analysts believe that the regulatory pressure on Meituan from the Chinese Communist Party authorities is one of the main reasons for the recent share price decline.
On March 3, the Communist Party’s State Administration of Market Supervision fined Meituan’s community group-buying business Meituan Youxuan RMB 1.5 million for “unfair pricing practices”. On April 26, the Chinese authorities announced that they had opened a case against Meituan.
Since the investigation, Meituan’s share price has been on the decline. According to mainland media reports, the share price has fallen from HK$305 per share to the current HK$259.8 per share, a 15% drop in less than a month.
After Alibaba, Meituan was also named by the Chinese Communist Party authorities to investigate “two-for-one” practices.
Bloomberg reports that the Chinese government is now increasingly concerned about the growing influence of giants like Ali, Tencent and Meituan in every aspect of Chinese life, as well as the vast amounts of data they have accumulated through their online shopping, chat and car-hire services.
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