U.S. shares in Meituan (HKEX: 03690; OTC: MPNGF) gained as much as 7% intraday Tuesday after Nomura analysts said they anticipate little impact on the company as a result of Beijing’s antitrust investigation.
On Monday, China's State Administration for Market Regulation (SAMR) posted a statement that said it launched a probe into the nation’s food delivery giant.
However, Nomura’s Shi Jialong and Thomas Shen “expect a limited impact on Meituan’s business,” according to a report on Monday, as cited by the South China Morning Post.
Further, “We note that POFT (picking one from two) practice helped play a big role in the early days of food delivery competition as it helped differentiate one’s restaurant supplies from those of competitors. We think Meituan’s strong market position and customers’ loyalty has enabled it to outgrow this POFT practice.”
In Hong Kong today, Meituan’s stock gained as much as 5% on the news.
Over alleged antitrust practices, Meituan and five other companies were fined 6.5 million yuan ($1.01 million) in March by China’s top regulator. In addition, e-commerce giant Alibaba (NYSE: BABA; HKEX: 09988) was slapped with a record fine of 18.2 billion yuan ($2.8 billion) earlier this month.
As a result of China’s regulatory crackdown, U.S.-based fund manager BlackRock, which has $8.7 trillion assets globally, has reduced its holdings in Chinese tech stocks over the last three quarters.
How long the investigation into Meituan is unknown but the company has been a solid gainer over the last couple of weeks. However, U.S.-listed shares remain down 31% since mid-February.