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GUANGZHOU, China – Meituan shares jumped more than 7% on Monday, pushing Chinese tech stocks up, after the food delivery giant was fined following an antitrust investigation.
China’s State Administration for Market Regulation (SAMR) on Friday said Meituan had abused its dominant position in the country’s online food delivery market. The market regulator said Meituan pushed traders to sign exclusive cooperation agreements with them and took punitive action for those who did not.
SAMR fined Meituan 3.44 billion yuan ($ 534.3 million) and ordered him to take corrective action, concluding a months-long investigation.
In a note released Sunday, investment bank Jefferies said the fine removed an “overhang” on Meituan.
“We believe the SAMR decision addresses market concerns and Meituan (MT) has communicated with authorities and improved its business operations,” Jefferies said.
Meituan was up more than 7% in early Hong Kong trading.
The fine was equivalent to 3% of Meituan’s 2020 turnover.
In another anti-monopoly investigation, Alibaba was fined $ 2.8 billion, or about 4% of the 2019 revenue that the e-commerce giant was forced to pay as part of an anti-monopoly investigation. -monopoly in April.
Other Chinese tech companies listed in Hong Kong also rose in early trading. Tencent rose 3% while Alibaba jumped more than 6%.
“Overall, the fact that Chinese stock markets are certainly trading a lot more attractive compared to most other countries in Asia,” Ken Wong, Asian equity portfolio specialist at Eastspring Investments, told Monday. CNBC’s “Street Signs Asia”.
“The Chinese markets… are trading at significantly lower valuation levels,” he said. “We are seeing investors angling a bit from the bottom.”
Wong said any positive sentiment from China towards the tech sector should lead to “more buying” of the related stocks.
China has increasingly scrutinized its domestic tech companies over the past year, wiping out billions of dollars in value from tech stocks.
Regulators have focused on strengthening unfair competition and data protection rules, but have even gone further than other jurisdictions in focusing their attention on regulating algorithms.
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