As we previously discussed
, Tencent-backed Meituan-Dianping, a Beijing-based technology startup unlike any other and China’s answer to Groupon, Uber Eats, and Yelp all rolled into one platform, has filed for a Hong Kong IPO. Full details of the listing are still yet to be released, but it is rumoured that Meituan have started taking orders for their Hong Kong IPO at HK$60 to HK$70 apiece for 480.27 million new Class B shares, valuing the company at US$50 to US$55 billion. Meituan plans to price September 13 (Australian Eastern Standard Time)
and will start trading on September 20 AEST.
Meituan is China’s leader in O2O (offline-to-online) services, creating a one-stop super app for a range of services, from haircuts, manicures and massages, to movie tickets, food delivery and hotel bookings.
Meituan has delivered impressive revenue growth at 744% from 2015 through to 2017, but despite growing revenue at a startling pace the company is still unprofitable. In 2017, revenue increased to 33.9bn yuan ($5.2bn), up 161% from a year earlier. Last year the company still posted a loss of 18.99bn yuan per the prospectus, although after adjusting for changes in the value of convertible redeemable preference shares, share-based compensation expenses and other items adjusted net loss was recorded as 2.85bn yuan; this is approximately half the net loss recorded in 2016. Operating loss is trending down and if the top line growth accelerates on the same trend along with the rapid acquisition of new users, then the potential to turn a profit is there.