GUANGZHOU, China — Meituan’s share price rose more than 7% on Monday, surpassing China’s tech stocks after the food delivery giant was fined as a result of an anti-trust investigation.
On Friday, China’s National Immigration Administration for Market Regulation (SAMR) said Meituan had abused its dominant position in the country’s online food delivery market. Market regulators said Meituan urged traders to sign special cooperation agreements with them and take punitive measures against those who fail to do so.
SAMR fined Meituan 3.44 billion yuan ($534.3 million), ordered corrective action, and completed a one-month investigation.
In a note on Sunday, investment bank Jeffreys said the fines removed the “overhang” of Meituan.
“We believe SAMR’s decision addresses market concerns, and Meituan (MT) is in contact with authorities to improve operations,” Jeffries said.
Meituan rose more than 7% in early Hong Kong trade.
The fine is equivalent to 3% of Meituan’s 2020 revenue.
Alibaba was fined $2.8 billion in another antitrust investigation. That’s about 4% of 2019 revenue that the e-commerce giant was forced to pay as part of April’s antitrust investigation.
Other Chinese tech companies listed in Hong Kong also rose in early trade. Tencent rose 3%, while Alibaba rose more than 6%.
Ken Wong, Asian equity portfolio specialist at East Spring Investments, told CNBC’s “Street Sign Asia” on Monday that “China’s stock market is undoubtedly … far higher than most other countries in Asia. The fact that we have It’s a tempting deal.”
“The Chinese market … is trading at a very low rating level,” he said. “Investors are looking a little bit bottom fishing,” he said.
Wong said China’s positive sentiment towards the tech sector should lead to “buying more” on related stocks.
Over the past year, China has increased its scrutiny of domestic tech companies, siphoning away billions of dollars in tech stocks.
Regulators have focused on toughening regulations on unfair competition and data protection, but they are more advanced than other jurisdictions by focusing on regulatory algorithms.
Source Link Meituan is fined for antitrust violations after China’s tech stocks rise