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HONG KONG – China's fast-growing technology start-up Meituan-Dianping has applied to Hong Kong and is seeking billions of dollars to finance its growth strategy in a highly competitive Internet market.
The Beijing-based online service provider is one of the most important private technology companies in the country. Its current investors include
Priceline Group
Inc.
BKNG -0.93%
the Canada Pension Plan Investment Board and a Chinese social media and gaming company
Tencent Holdings
Ltd.
TCEHY 1.04%
Meituan said he lost money last year, but his income has more than doubled, and he expects to maintain rapid growth as more and more Chinese consumers spend money. 39, money online.
Meituan has not revealed how much it plans to increase in the sale of shares, but the company is targeting an assessment of more than $ 60 billion, according to people familiar with the case . Companies listed in Hong Kong generally sell at least 10% of their shares when they become public.
Goldman Sachs
,
Morgan Stanley
,
Bank of America and Merrill Lynch are the major banks that deal with the IPO of Meituan.
In a Hong Kong Stock Exchange filing, Meituan reported generating 33.9 billion yuan ($ 5.2 billion) in revenue in 2017, up 161 percent over the previous year.
The company recorded a loss of 18.99 billion yuan last year, according to its prospectus.
The company also said its adjusted net loss was 2.85 billion yuan in 2017, about half of what it was for the previous two years. The adjusted figure excludes stock-based compensation costs as well as gains and losses on investments, asset sales and discontinued operations. Meituan said it had 19.4 billion cash equivalents by the end of last year.
The initial public offering of Meituan, which is expected to take place in the coming months, is part of the wave of listings expected by Chinese unicorns, a term used to describe private companies whose valuations exceed $ 1 billion. Last week, the Chinese smartphone maker Xiaomi Corp. launched an IPO in Hong Kong that aims to raise up to $ 6.1 billion. It is about $ 55 billion to $ 70 billion.
Meituan, the public transportation company Didi Chuxing Technology Co. and the mobile content company Beijing Bytedance Technology Co. have been called by market participants as a promising trio of influential Internet companies, behind giants like Tencent and
Alibaba Group Holding
Ltd.
Founded in 2010 by Chinese entrepreneur Wang Xing, Meituan has become one of the most valuable private startups in the world by creating a platform that provides services to the growing Chinese middle class. In 2015, he merged with Dianping, an evaluation site. The startup was valued at $ 30 billion in October after raising $ 4 billion from investors in China, the United States and elsewhere.
The Chinese Internet business has no equivalent counterpart in the United States. Instead, she sells coupons like
groupon
Inc.
provides opinions and lists like
yap
Inc.
and offers food delivery as
GrubHub
Inc.
It also sells movie tickets and offers hotel and travel bookings. Meituan said that it has served 310 million users "transacting" last year, referring to customers who have made at least one transaction on its platform.
His food delivery service rivals an Alibaba unit for dominance. Both companies offer discounts to attract and retain customers. And a recent incursion into the race could provoke an expensive fight with Didi, who is supported by Japan
SoftBank Group
Corp.
With revenue from deliveries, the company earns money by selling advertisements to merchants. Other sources of revenue include commissions on coupon sales and the sale of commercial services to Chinese merchants seeking to digitize their operations.
Meituan held 59% of China's on-demand food delivery market in the first quarter of this year, according to data from the company's iResearch Consulting Group. The Ele.me delivery unit of Alibaba is the biggest competitor of Meituan in China.
Write to Liza Lin at [email protected] and Stella Yifan Xie at [email protected]
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