Hong Kong-listed Meituan has quickly become China's third-most-valuable internet company behind only Tencent Holdings Ltd. and Alibaba Group Holding Ltd., with a market value of more than $312 billion. Shares in Meituan, which went public in September 2018, have more than quadrupled in the past year. They surged 4.9% Wednesday to close at a record high of 414.20 Hong Kong dollars, the equivalent of $53.43.
Meituan runs an app that enables users to order a variety of real-world services including meal delivery, as well as hotel, flight, taxi and restaurant bookings. It is also one of the contenders in what is dubbed community group buying--a fast-growing e-commerce niche in China.
Valuations for all kinds of online businesses in the U.S. and China have soared, as investors have placed an ever higher premium on growth coupled with economic resilience. Analysts say Meituan's chances of cracking the grocery business in China have been a reason for its rise in recent months, even as the industry's breakneck growth has drawn the attention of regulators.
"The company's new initiative in grocery group buy is what has excited the market," said Jialong Shi, China internet analyst at Nomura.