Meituan-Dianping wins approval for HK float

Meituan-Dianping, an online food delivery and booking platform, is said to have won approval from the Hong Kong stock exchange for its planned IPO, in what would be the second listing under the city’s new dual-class share system.

The company filed for the listing in June, following smartphone maker Xiaomi’s blockbuster IPO of $4.7 billion, the first Hong Kong-listed company with a dual-class structure. The weighted voting rights structure is designed to make Hong Kong a magnet for tech companies.

Beijing-based Meituan-Dianping reportedly passed its listing hearing on Thursday, drawing closer to becoming the city’s second multibilliondollar tech float this year. Insiders forecast its IPO could raise more than $4 billion and fetch a valuation of $45 billion to $55 billion.

The company, backed by Tencent Holdings Ltd, reportedly plans to kick off its IPO roadshow and open the retail book in early September, a timetable that would schedule its debut for Sept 20.

The offering comes at a delicate time, when protracted Sino-US trade tensions are weighing on the city’s equity market and investors are losing their appetite for tech floats from the likes of Xiaomi and Ping An Good Doctor.

Founded in 2010 by serial entrepreneur Wang Xing, Meituan completed a $15 billion merger with Dianping in 2015 to build a business empire that offers a broad range of local services, from food delivery, restaurant reviews, group-buying deals and movie ticketing to hotel and travel bookings.

The company muscled in on ride-hailing giant Didi Chuxing’s turf this year, adding a car-hailing business to its menu and snapping up bikesharing firm Mobike in April for $2.7 billion to wage a nationwide price war.

“As more investments go into cash-burning businesses like ride-hailing, and food delivery has yet become a cash cow, it may not necessarily be bad timing for Meituan-Dianping to go public right now,” said Cheung Chiwai, co-director of Hong Kong-based Prudential Brokerage Ltd.

Like many tech floats, Meituan-Dianping is still a moneylosing machine. Its adjusted net loss continued to narrow from 5.9 billion yuan ($857 million) in 2015 and 5.4 billion yuan in 2016 to 2.9 billion yuan last year.