Chinese tech company Meituan Dianping made a robust stock market debut Thursday after raising billions of dollars from investors.
Shares in Meituan, whose app is used by more than 300 million people, jumped as much as 7% in morning trading in Hong Kong. The stock ended the day up 5%, giving it a market value of about $50 billion.
Its strong start contrasts with the weak debut by the previous big Chinese tech IPO in the city. In July, smartphone maker Xiaomi’s shares fell on their first day and are trading below their IPO price more than two months later.
Meituan’s app offers a one-stop shop for services where people can make lunch reservations, buy movie tickets, book vacations or hail car rides. The company raised $4.2 billion from its IPO, pricing its shares near the top of its target range.
Several recent Chinese tech listings in the United States have made volatile starts.
Electric-car company Nio(NIO), which went public in New York last week, yo-yoed on its first day of trading and then soared 76% the next. It’s now trading 35% above its IPO price.
News aggregator Qutoutiao’s(QTT) share price more than doubled on its Nasdaq debut on Friday, but then plunged 35% on the second day. Online shopping platform Pinduoduo(PDD) has also had a series of double-digit gains and losses since it listed in July.
Meituan, which likes to call itself the “Amazon of services,” is benefiting from Chinese consumers’ enthusiasm for doing as much as possible through their phones.
The Beijing-based startup was formed in 2015 by the merger of two smaller companies — Meituan and Dianping — that were viewed as China’s equivalents of Groupon(GRPN) and Yelp(YELP).
The company plans to use the cash from the IPO to upgrade its technology, develop new products and services, and make acquisitions and investments. Meituan made headlines earlier this year by buying Chinese bike-sharing company Mobike in a deal reportedly worth around $3 billion.
Meituan has some big-name investors, including Google(GOOG) and Tencent(TCEHY). But it’s competing with some of China’s tech heavyweights like Alibaba(BABA) and ride-hailing firm Didi Chuxing.
CNNMoney (Hong Kong) First published September 20, 2018: 12:17 AM ET