Author | Liu Baodan
Editor | Zhou Zhiyu
In the past few days, the Chinese stock market has experienced an unprecedented wave of market trends. The Shanghai Composite Index broke through 3600 points, the total turnover of the Shanghai and Shenzhen stock markets exceeded 3 trillion yuan, and securities firms saw a surge in new account openings. A series of policies at the end of September completely reversed the market's expectations, igniting investors' enthusiasm.
As a highly representative Chinese concept stock, Meituan's stock price also reflects this market change. From hovering around a market value of 700 billion Hong Kong dollars to breaking through 1.1 trillion Hong Kong dollars, Meituan's market value surged by over 400 billion Hong Kong dollars in just 8 days.
Since September 24th, Meituan's stock price has soared by as much as 58.6%, leading the Hang Seng TECH Index. Such a surge is undoubtedly rare in the past three years.
Meituan has once again become the darling of investors, becoming the &#34;flag bearer&#34; in this round of bull market for the revaluation of Chinese assets.
To a certain extent, in this wave of stock market frenzy, Meituan's trend has become a leading indicator of fund movements. Improvements in investors' expectations for Meituan's performance, capital inflows into Chinese assets, and more have all propelled Meituan to become the &#34;shining star&#34; in the Hong Kong stock market. In the upcoming market trends, Meituan will continue to be a key indicator.
Of course, behind the sharp rise, there are also factors such as Meituan's performance rebounding from the bottom and returning to a growth trajectory. On October 9th, it was reported that Meituan's overseas version Keeta was officially launched in Riyadh, the capital of Saudi Arabia, marking the start of its overseas expansion. Meituan is charging towards new battlefields, telling investors more stories.
After 13 years of development, Meituan has entered a brand new stage of development. Whether Wang Xing can lead Meituan back to the peak of market value, this capital feast may be a crucial turning point.
<h2>Craze</h2>
The capital market has finally ushered in a long-lost carnival, with nearly 800 stocks hitting the daily limit, and Meituan is also at the forefront of this craze.
On October 9th, Meituan closed at 184.4 Hong Kong dollars, up 2.33%. Over the past two weeks, Meituan's stock price has experienced a significant increase. According to observations by Wall Street News, since September 24th, Meituan's stock price has risen by as much as 58.6%, with a daily maximum increase of 14.64%.
Compared to this, the Hang Seng TECH Index had a maximum increase of 37.6% during the same period, meaning that Meituan's stock price increase far exceeded the broader market. Meituan's increase is also much higher than similar technology companies. During this period, Alibaba's stock price rose by 22.6%, Pinduoduo by 43.7%, and JD.com by 47.2%.
The rise in stock price directly boosted Meituan's market value. According to data from Tonghuashun iFinD, Meituan's market value reached a nearly two-year high on October 4th, at 1.2984 trillion Hong Kong dollars. Within just eight days, the market value increased by 448.2 billion Hong Kong dollars (approximately 407.5 billion RMB).
The core driving force behind the stock price increase mainly comes from a series of recent favorable policies. Shen Meng, director of Xiangsong Capital, stated that the rise in Meituan's stock price is mainly influenced by financial policies issued by institutions such as the central bank before the holiday, with the core being the improvement in policy expectations by investors.
Another important factor is the Fed's interest rate cuts. As per past practices, after the Fed enters an interest rate cut cycle, global funds will begin to reallocate, flowing into emerging markets, especially international financial centers like Hong Kong, and Chinese concept stocks will benefit first
Apart from the overall market factors, the reason why Meituan can lead the Chinese concept stocks is also due to the generally optimistic outlook on the company's performance. Compared to the e-commerce sector, Meituan's local life services business has extremely strong consumption resilience.
Taking the National Day holiday as an example, Meituan's data shows that nationwide in-store consumption for life services increased by 41.2% year-on-year. Among them, the daily consumption of tourists increased by 69.6% year-on-year compared to the previous year's holiday. Popular scenic spots still attract crowds, with cultural and historical study tours, as well as Hanfu-themed travel photography and other new cultural and tourism activities being favored by young people.
In fact, even before this wave of stock price increases, Meituan's stock price had already started to rebound from its low point, showing a slow recovery trend, mainly due to the strong growth in Meituan's performance.
On August 28th, Meituan announced its second-quarter report for 2024, with the company achieving revenue of RMB 82.25 billion and an adjusted net profit of RMB 13.6 billion, exceeding market expectations and gaining recognition from the capital market.
In particular, Meituan's core local business segment achieved an operating profit of RMB 15.234 billion in the second quarter, a year-on-year increase of 36.8%, with an operating profit margin increasing by 3.3 percentage points to 25.1%. Meituan has emerged from the darkest moments brought by Douyin (TikTok) and regained control over its development.
In other words, the positive sentiment of the global capital market towards Chinese concept stocks, combined with the recovery of Meituan's fundamentals, has enabled the company to seize this wave of listing opportunities.
However, there is still a considerable distance for Meituan to return to its peak.
<h2>Differences</h2>
In 2018, when Meituan first went public, it was considered one of the best practices of the mobile internet in China; by 2021, Meituan's market value soared to RMB 2.4 trillion, becoming the third largest internet company in China and truly becoming the king of local life.
However, as Chinese concept stocks collectively cooled down, Meituan's stock price began to decline, especially in the past two years. With Douyin entering the local life sector with traffic and quickly opening the door to the offline market that Meituan had dominated, Meituan was caught off guard. As a result, Meituan's business model began to face scrutiny from the capital market.
Any news about Douyin entering the food delivery sector or industry acquisitions would further increase the capital market's concerns. On January 17th, Meituan's stock price fell below its IPO price of HKD 69. By the end of January, Meituan's market value had dropped by RMB 2.08 trillion from its peak.
After being hit, Meituan finally began to fight back by reorganizing its combat capabilities through organizational adjustments. At the same time, Meituan regained consumers through strategies such as live streaming and key opinion leaders. In the first half of this year, Meituan's food delivery service exceeded 500 million annual active users, with nearly half of internet users using Meituan.
Additionally, Meituan is actively expanding internationally. After successfully operating in the Hong Kong market, Meituan chose Saudi Arabia as its first stop for international expansion. In August, Wang Xing officially renamed the overseas business as Keeta, and in September, Meituan began pilot operations in Saudi Arabia. In October, Meituan officially launched in Riyadh, the capital of Saudi Arabia.
Until this wave of bullish capital market, Meituan's stock price returned to a trillion-dollar valuation, receiving long-awaited enthusiasm from the capital market.
However, whether the current feast can continue, whether it is a flash in the pan or a long-term bull market, these are the most concerning questions in the market currently, and they are also the key factors determining the direction of Meituan's stock price
The market has shown divergence. On October 8th, Meituan's closing price was HKD 180.2, a decrease of 15.48%. Shen Meng believes that this may be due to Hong Kong funds participating in A-share trading through the Shanghai-Hong Kong Stock Connect, while the information released by the NDRC is significantly lower than market expectations, leading to continuous declines in both A-shares and Hong Kong stocks.
Tianfeng Securities' Du Penghui believes that the core logic of this round of rise is that A-shares are the &#34;main battlefield&#34; of the market interpretation. The Hong Kong stock market does not have a large base of domestic investors entering the market, but rather focuses more on passive valuation repair, particularly the absolute valuation repair of PB.
Several investment bank professionals told Wall Street News that among the constituents of the Hang Seng TECH Index, Meituan is the top choice for foreign institutional investors. Competition easing with rivals such as Douyin, high growth in local services, and profit margin growth have improved Meituan's fundamentals, providing a basis for valuation repair.
Recently, institutions such as Daiwa, Citigroup, and UBS have significantly raised their target prices for Meituan.
On October 9th, Daiwa's research report pointed out that Meituan's food delivery and local services businesses should benefit from consumption recovery, and its recent outperformance in the market has led to higher valuation compared to peers. The bank reiterated a &#34;buy&#34; rating on the company, raising the target price from HKD 160 to HKD 235.
UBS also raised its operating profit forecast for Meituan for 2025 to 2028 by 5% to 21%, raising the target price from HKD 172 to HKD 270. The bank believes that Meituan's profit growth is accelerating and significant, with a forecasted five-year compound annual growth rate of 33%, justifying a premium. Moreover, mainland macro stimulus policies may further drive Meituan's stock price higher.
This also means that the current rapid rise of Meituan, although strong, is also supported by fundamentals.
However, the significant volatility on October 8th indicates that the funds driving Meituan's rise are more of trading behavior rather than allocation behavior.
If the policy environment becomes more favorable in the future, Meituan could also become the top choice for foreign long-only funds. Goldman Sachs pointed out that the global active funds (mainly public funds) have a China allocation level of only 5%, down from 15% four years ago.
This means that if foreign funds adopt an active allocation strategy and go long-term, Meituan could launch a new round of offensive and show more positive performance in its stock price.
Over the past six years, Meituan has gone through the entire process of listing, being highly sought after, and facing doubts. Now, Wang Xing is standing at a new starting point, which will be a crucial battle for leading Meituan back to its peak

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- The Chinese stock market has recently experienced unprecedented growth, with the Shanghai Composite Index surpassing 3600 points and Meituan's market value soaring by over 400 billion HKD in just eight days.  
- This surge is attributed to favorable policies and improved investor expectations, alongside Meituan's strong performance in local services, which has made it a leading indicator in the market.  
- However, concerns remain about the sustainability of this rally, as market dynamics and external factors could influence Meituan's future valuation and growth trajectory.

Meituan surged by 400 billion in 8 days