Foreign media giant Meituan raised US$10 billion through the sale of stocks and convertible bonds. This move shows that, despite the regulators' increased management of the technology industry, investors are still full of confidence in the growth prospects of some Chinese technology companies.

　　(Image source: Meituan)

　　Meituan has received investment from Tencent, and the company's current market value has reached 220 billion U.S. dollars. The company said it plans to use the latest combat readiness funds to invest in self-driving delivery vehicles, delivery drones and other cutting-edge technologies.

　　Zhang Yi, head of iiMedia Consulting, said: “Meituan will use most of the funds to update its delivery system. This system currently relies heavily on drivers. As China’s labor costs continue to rise, the company will soon be unable to afford it. Set up this system. They are making plans for the next 5-10 years."

　　In this record-setting financing, Meituan sold US$6.6 billion worth of stocks and exchanged two batches of convertible bonds for approximately US$3 billion. Another US$400 million was raised through the sale of more shares to Tencent Holdings Co., Ltd., which is Meituan’s largest shareholder and currently holds approximately 17% of the shares. Meituan sold 187 million shares at a price of HK$273.80 per share, close to the high end of the indicated range set on Monday. According to Dealogic's data, a total of US$7 billion in new shares placement set a record for Hong Kong stocks.

　　According to a person familiar with the matter, at least 300 investors have subscribed for Meituan’s stock, and the top 20 investors have bought about two-thirds of them. According to sources, most of the demand comes from global one-way long funds, hedge funds and Chinese investors. Since the details of the transaction have not been made public, the source declined to reveal his identity. Meituan declined to comment.

　　Trustdata data shows that as of the second quarter of 2020, Meituan controls 68.2% of China's food delivery market share, and its main competitor is Ele.me, which has received investment from Alibaba. Takeaway delivery accounts for more than half of Meituan’s total sales. Since 2016, the size of China’s takeaway market has increased by more than five times, reaching 650 billion yuan. In addition to takeaway delivery, Meituan also owns restaurant reviews and shared bicycles.