What’s going on?Meituan shares plunged nearly 15 per cent, wiping HK $200bn off its market capitalisation

2022-06-17 0 By

On the last trading day of the week, The A-share market was relatively stable, but the Hong Kong stock market suddenly took A dive after 2:40 p.m., with the Hang Seng index down 1.88 percent, the STATE-OWNED enterprises Index down 1.99 percent and the Hang Seng Technology Index down 3.22 percent.1, Meituan shares drag index stocks plunge mainly, dragged down by Meituan Meituan shares fell 14.86% today, intraday fell more than 17%, although Meituan today’s share price is low, but has maintained between 1% – 2% share prices fall, 2:40 began to plunge, stock prices plummet, less than one hour,Shares plunged more than 17 per cent, but were still down nearly 15 per cent in late trading, wiping HK $200bn off their market value.Meituan closed at HK $188 per share, an auspicious number, but a drop of nearly 15% was a bit scary. Led by Meituan, The shares of Internet companies fell by more than 5% on Bilibili, nearly 5% on Kuaishou, nearly 3% on JD.com and Alibaba, and nearly 2% on Tencent.Why did Meituan share price suddenly dive?On February 18, 14 departments including the National Development and Reform Commission issued several Policies on Promoting the Recovery and development of Difficult Industries in the service sector. The document pointed out that: Guiding takeout and other Internet platform enterprises to further reduce the service fee standards of restaurant merchants and reduce the operating costs of relevant catering enterprises.Internet platform enterprises will be guided to offer preferential service fees to catering enterprises in county-level administrative areas where high-risk areas are located.This file is good for the whole service industry, because the greatest influence since the outbreak of the service industry, transportation, tourism, retail, catering, entertainment and other services are subject to varying degrees of impact, so the development and reform commission and other departments of 14 joint dispatch service industry enterprises to bail out and helping service enterprises to survive,Generally speaking, it is to cut taxes and fees and provide financial support such as loans.Help the difficulty in the field of enterprise is not only the responsibility of the government, they also need some big participation, service platform, to help enterprises to survive, delivery platform for catering enterprises is a business platform, annual contribution commission also many, such as industry in trouble now, appropriate relief some cost, although have influence on the income in the short term foreign selling platform,But in the long run it is good.However, judging from the performance of stock prices, capital is shortsighted. The purpose of capital is to continuously increase, and the purpose of enterprises is to make profits. If the service fee standard of restaurant merchants is lowered now, it will inevitably affect the revenue and net profit of meituan and other delivery platform giants, or even decline.After all, Meituan lost nearly $20 billion in the first three quarters of 2021.The plunge in share prices is not hard to understand.However, from a more macro perspective, the catering business is water, and the takeout platform is a boat. Water can carry the boat but also overturn it. If the water source dries up, the takeout boat will be difficult to operate, and even have the risk of drowning.It is not easy for capital to yield profits, even under China’s socialist system. Otherwise, it is the nature of capital to make a big profit by taking advantage of rising prices.There are 42 specific measures in the document to help enterprises overcome difficulties, but only article 12 is concerned with the transfer of profits of Internet capital. The other 41 articles are about how the government and state-owned enterprises help service enterprises to get through the bailout.