Meituan Dianping shares plunge most since Hong Kong IPO after losses widened on higher costs

Meituan Dianping’s shares plunged the most since its IPO in September after the local services company reported losses widened on higher operating expenses, disappointing investors looking for a path to profitability.

The stock plunged 12 per cent to HK$53.85 at the close of Hong Kong trading on Friday, the biggest decline since the company began trading as a public company.

Losses widened last quarter to 83.3 billion yuan, compared with a 4.4 billion yuan loss a year ago, reflecting the intense competition with Alibaba Group Holding, parent company of the South China Morning Post.

Chairman and chief executive Wang Xing told analysts on a post-earnings conference call that he is taking more time to focus on the fundamentals.

The company has expanded at a breakneck pace into new businesses like ride-hailing and bicycle-sharing, while building up its market share in food delivery ahead of its US$4.2 billion IPO in September.

“After the IPO, I’m spending more time on building our organizational capability,” Wang said on the conference call.