Meituan unveils US$2.9bn loss as it prepares investors for long-term in Hong Kong IPO filing
The listing is likely to be the city’s second multibillion-dollar listing by a tech company following smartphone vendor Xiaomi
Meituan Dianping, China’s biggest platform for on-demand services, cautioned investors that it may remain loss-making for some time in a filing for an initial public offering in Hong Kong on Monday, saying it was focused on “thinking long-term” and expanding its customer base.
Meituan, which unveiled a net loss of 19 billion yuan (US$2.9 billion) last year or 2.9 billion yuan excluding share-based compensation and other one-time factors in the filing, is expected to float in the third quarter. The company is seeking to raise US$6 billion at a valuation of about US$60 billion, according to a Bloomberg report.
“Consistent with our operating philosophy of thinking long-term and seizing strategic business opportunities, we may take actions that fail to generate short-term profitability,” the Beijing-based company pointed out under the risk section in the filing. “Our efforts are focused on expanding our customer base, satisfying unmet customer needs and enhancing our network, rather than prioritising monetisation now.”
The listing is likely to 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 expects to use the IPO funds to upgrade its technology, develop new services and products and pursue investments in businesses that are complementary to current strategies, according to the filing.
Founded in 2010 by Wang Xing, a Tsinghua University alumnus, Meituan says it is on a mission to make people “eat better and live better”. Meituan started as a Groupon like group-buying site before merging with rival Dianping in 2015 to create China’s largest lifestyle platform business.
Meituan launched food delivery services in 2013 and expanded into the ride-hailing business in December 2017 after 10 months 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.