Tencent-backed Meituan jumps 5 percent on debut in positive signal for HK IPOs

By Julia Fioretti

HONG KONG (Reuters) - Meituan Dianping soared on debut in Hong Kong on Thursday, valuing the Chinese online food delivery-to-ticketing services firm at about $55 billion and sending a positive signal to companies lining up to list in the financial hub.

Its shares climbed 5.2 percent to HK$72.6 ($9.26) in mid-morning trade, compared with Meituan's initial public offering (IPO) price of HK$69 per share. China's biggest gaming and social media company Tencent Holdings is a key investor in the loss-making company.

Meituan's stock market performance is being seen as a test of investor appetite for Hong Kong listings against a backdrop of weak markets and previous multi-billion dollar IPOs that have struggled to hold above their issue price, such as smartphone maker Xiaomi and China Tower.

The strong debut reflects investor confidence that Meituan can fend off bruising competition from food-delivery platform Ele.me, which is backed by China's biggest e-commerce company Alibaba Group Holding. Both have been offering heavy discounts to win new customers, in a battle for market share.

Meituan co-founder and chief executive Wang Xing, at the listing ceremony on the Hong Kong stock exchange on Thursday, praised the role of the company's almost 600,000 delivery persons and 50,000 employees in fuelling its growth.

"I also want to thank Steve Jobs, thank Apple, without iPhone, without mobile internet, everything we do today wouldn't have been possible," he said.

This year is set to be the biggest year for IPOs in Hong Kong since 2015, helped in part by a market rally late last year and rules introduced this year to attract tech companies by allowing them to weight voting rights in favour of their founders.

Meituan is the second company with such a share structure to go public as well as the second multi-billion dollar tech float in Hong Kong this year, following in the footsteps of Xiaomi.

Hong Kong listings have raised $28.7 billion so far this year, compared to $33.8 billion raised in 2015, according to Thomson Reuters data.

However, an 18 percent drop in the benchmark Hang Seng index from its January peak and a worsening Sino-U.S. trade war have clouded the prospects for other companies looking to go public, as investors become more cautious and selective.

Of the biggest 10 listings in Hong Kong this year, just one, Zhenro Properties, is trading above its issue price.

Meituan priced its IPO near the top end of an indicative price range of HK$60 to HK$72, receiving strong support from institutional investors.

Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley were joint sponsors of the IPO.

($1 = 7.8440 Hong Kong dollars)

(Reporting by Julia Fioretti and Sijia Jiang; Editing by Edwina Gibbs and Muralikumar Anantharaman)