Guangzhou, China-Meituan’s share price soared by more than 7% on Monday, leading Chinese technology stocks higher after the food delivery giant was fined for antitrust investigations.
On Friday, China’s State Administration for Market Regulation (SAMR) stated that Meituan had abused its dominant position in China’s online food delivery market. The market supervision department stated that Meituan promotes merchants to sign exclusive cooperation agreements with them, and imposes penalties on merchants who have not signed exclusive cooperation agreements.
The State Administration of Market Supervision fined Meituan RMB 3.44 billion (US$534.3 million) and ordered it to take corrective measures, ending the months-long investigation.
In a report on Sunday, Jefferies, an investment bank, said that the fine removed the “suspense” of Meituan.
“We believe that the decision of the General Administration of Market Supervision has resolved market concerns, and Meituan (MT) has been communicating with the authorities and upgrading its business operations,” Jefferies said.
Meituan rose more than 7% in early trading in Hong Kong.
The fine is equivalent to 3% of Meituan’s 2020 revenue.
In another antitrust investigation, Alibaba was fined $2.8 billion-as part of the antitrust investigation in April, the e-commerce giant was forced to pay about 4% of 2019 revenue.
Other Chinese technology companies listed in Hong Kong also rose in early trading. Tencent rose 3%, while Alibaba rose more than 6%.
“In general, the Chinese stock market is definitely…compared to most other countries in Asia, trading is more attractive,” Ken Wong, an Asian equity portfolio expert at Hanya Investment, told CNBC’s “Asian Signpost” on Monday. “Express.
“The Chinese market… has a much lower valuation level,” he said. “We are seeing investors bottoming out a bit.”
Wong said that any positive sentiment in China towards the technology industry should lead to “more purchases” of related stocks.
In the past year, China has been strengthening its scrutiny of domestic technology companies, and the value of the technology stock market has evaporated by billions of dollars.
Regulators have been focusing on tightening rules on unfair competition and data protection, but by turning their attention to regulatory algorithms, they have gone even further than other jurisdictions.