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Meituan-Dianping (3690.HK) debuted in Hong Kong today, a sign that investors have confidence in the prospects of the company supported by Tencent despite its cash-generating growth strategy, its strong competition and the weakness of the Hong Kong Stock Exchange.
During morning trading, Meituan shares reached a high of HK $ 73.85 (about US $ 9.41), an increase of 7% over the original price of HK $ 69. When Meituan set a target value of $ 55 billion for its beginnings, it raised concerns that the company, called a "super single application" for everything from food delivery to ticket reservations ,
If Meituan, the owner of Mobile, is China's leading online services market, it faces daunting competition from Alibaba and operates on tight margins and heavy losses. While preparing for his IPO, Meituan was also under the shadow of Hong Kong's disappointing debut by Xiaomi and China Tower. Like Xiaomi, Meituan is listed under a new two-class stock structure designed to attract technology companies by allowing them to grant weighted voting rights to the founders.
The sponsors of the Meituan IPO are Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley.
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