Chinese language tech shares rise after Meituan was fined antitrust legislation
GUANGZHOU, China – Meituan shares rose over 7% on Monday, leading Chinese technology stocks higher after the food delivery giant was fined for an antitrust investigation.
On Friday, China’s State Administration of Market Regulation (SAMR) said Meituan had abused its dominant position in the country’s online grocery delivery market. The market regulator said Meituan has urged traders to enter into exclusive cooperation agreements with them and taken punitive measures for those who fail to do so.
The SAMR fined Meituan 3.44 billion yuan ($ 534.3 million), ordered her to take corrective action, and completed a month-long investigation.
In a statement on Sunday, investment bank Jefferies said the fine had removed an “overhang” on Meituan.
“We believe the SAMR decision addressed market concerns and Meituan (MT) communicated with authorities and improved its business,” said Jefferies.
Meituan gained more than 7% in early Hong Kong trade.
The fine was equivalent to 3% of Meituan’s sales in 2020.
In a separate anti-monopoly investigation, Alibaba was fined $ 2.8 billion – roughly 4% of the 2019 revenue the e-commerce giant paid as part of an anti-monopoly investigation in April .
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Other Hong Kong-listed Chinese tech companies also gained early trading. Tencent was up 3% while Alibaba was up more than 6%.
“Overall, the Chinese stock markets are definitely … a lot more attractive compared to most other countries here in Asia,” Ken Wong, Asian stock portfolio specialist at Eastspring Investments, told CNBC’s Street Signs Asia on Monday.
“The Chinese markets … are trading at much lower valuation levels,” he said. “We see investors doing a little bottom fishing.”
Wong said any positive sentiment from China towards the tech sector should lead to “more buying” of the relevant stocks.
China has been scrutinizing its domestic tech companies over the past year, wiping billions of dollars in value from technology stocks in the process.
Regulators have focused on tightening unfair competition and data protection rules, but have gone further than other jurisdictions by focusing on regulatory algorithms.