Meituan-Dianping Sets Hong Kong Debut Next Month
Meituan-Dianping, China’s largest group discount platform and online, on-demand services provider, plans to list on the Hong Kong bourse Sept. 20, sources close to the matter told Caixin.
The company cleared pre-listing inquiries by the exchange, the sources said.
Meituan’s IPO is widely expected to be another Hong Kong blockbuster, raising at least $4 billion and putting the company’s value at $50 billion to $55 billion, according to the sources. Last month, Chinese smartphone-maker Xiaomi Corp. raised $4.7 billion in a Hong Kong IPO.
The IPO will deepen Meituan’s resources for an escalating turf war in the burgeoning online, on-demand local services market. Meituan, backed by social media giant Tencent Holdings Ltd., holds a leading position in the hotly contested online food-delivery sector, offers hotel and travel bookings, has entered the ride-hailing business, and in April acquired a major bike-sharing company.
But it faces stepped-up competition from Alibaba Group Holding Ltd., which Thursday announced the combination of its food-delivery platform Ele.me and its local service unit Koubei with a $3 billion injection of fresh funds.
Ele.me, China’s second-largest online food delivery platform behind Meituan, last month announced a plan to spend 3 billion yuan in three months to launch a “summer turf war.” Ele.me CEO Wang Lei pledged to lift its market share to more than 50%.
Meituan will begin a global roadshow Sept. 3 for its Hong Kong IPO, the sources said. The company was valued at $30 billion in its latest funding round in October, in which it raised $4 billion from investors led by Tencent.
Although it claims 310 million active users and a 60% share of the online food delivery market, Meituan has yet to turn a profit. In its IPO prospectus filed in June, Meituan disclosed a 19 billion yuan ($2.76 billion) loss for 2017, steeper than in the previous two years. But its adjusted net loss narrowed to 2.85 billion yuan from 5.34 billion yuan in the prior year.
The company said the adjusted net loss excluded the impact of fair value changes of convertible redeemable preferred shares and other items. Revenue more than doubled to 33.9 billion yuan from 13 billion yuan in 2016.
Meituan also offers hotel and travel bookings, which contributed 32% of total revenue in 2017. But Meituan’s hotel business mostly involves budget bookings. It’s still hard to challenge industry leader Ctrip’s dominance in high-end hotels.
In April, Meituan acquired leading bike-sharing company Beijing Mobike Technology Co. Ltd. for $2.7 billion. It’s unclear how the acquisition will affect Meituan’s bottom line. Caixin has learned that Meituan will update its IPO prospectus next week to include Mobike’s financial statements.
Meituan’s recent foray into ride-hailing could also provoke a potential price war with car-hailing leader Didi Chuxing Technology Co. Ltd., which itself recently entered the food takeout space.
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