Meituan expected to file Hong Kong IPO application this week

Apart from food delivery, Meituan is a go-to-destination in China for booking movie tickets, hotels and travel packages

PUBLISHED : Thursday, 21 June, 2018, 12:31pm
UPDATED : Thursday, 21 June, 2018, 11:02pm

Meituan Dianping, China’s biggest platform for on-demand services, plans to file an initial public offering application to the Hong Kong stock exchange on Friday, according to people familiar with the matter.

The offering will likely be the city’s second multibillion-dollar listing by a tech company following smartphone vendor Xiaomi, which is expected to float in early July.

Meituan has hired Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch, and China Renaissance as its underwriters, two people familiar with the information said, asking not to be identified as the information is private. The company declined to comment on its listing plan.

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The size and valuation of the offering remains unclear at this stage. According to an earlier report by Bloomberg, the company could raise about US$6 billion by selling a 10 per cent stake. The internet giant held pre-IPO marketing activity earlier this month, according to the people familiar.

Founded in 2010 by Wang Xing, a Tsinghua University alumnus, Meituan is on a mission to make people “eat better and live better”, according to the company. Starting as a Groupon like group-buying site, the Beijing-based start-up merged with rival Dianping in 2015 to create China’s largest lifestyle platform business.

Hong Kong fell to fourth position in the worldwide IPO stakes last year, overtaken by Shanghai and Shenzhen for the first time. To catch up, Hong Kong’s securities regulator and market operator together pushed through a controversial reform of the city’s listing rules, opening the doors for pre-revenue biotechnology researchers and technology companies with multiple classes of stocks to sell equity. A successful listing by Xiaomi is expected to pave the way for more blockbuster fundraising exercises in the city.

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Meituan launched food delivery services in 2013 and expanded into the ride-hailing business in December after nearly a year of soft operations in Nanjing. In April it acquired one of China’s two leading bike-sharing start-ups, Mobike, for US$2.7 billion, ramping up its strength in China’s transport market. It is also a go-to-destination in the world’s most populous nation for booking movie tickets, hotels, travel packages and errand services.

Meituan was valued at $30 billion in the latest round of financing led by Tencent Holdings last October, making it the fourth most valuable start-up globally, according to CB Insights. The company had an active customer base of 310 million and served by 4.4 million merchants as of 2017.