Wang Xing, the founder, and CEO of China's online service super-app Meituan, at one time, pledged his shares in Meituan to Goldman Sachs and borrowed $285 million to invest in Chinese EV maker Li Auto, according to a veteran media personality.
Kate Yingchun Kui, former director of investment banking at Bank of America Merrill Lynch, former senior vice president of JD.com, and veteran media personality, whose in-depth analysis show Kate's Show went live on Feb. 4, explained in detail Meituan's business and the secrets of its rising stock price.
Kui said Meituan's investment in Li Auto generated a return of RMB 5.8 billion ($897 million), allowing Meituan to nearly quadruple its net profit year-on-year for the third quarter of 2020.
"When Li Auto Auto was at a loss for financing in 2019, Li Auto's investors had looked around for money, but the results were not good. Finally, Li Xiang, the CEO of Li Auto, found Wang," Kui stated.
Kui revealed: "Wang looked at the new energy market for a long time, first, Meituan's business will use the car; second, the way it reaches users was in line with Meituan's overall development logic; third, the new energy industry in line with the development trend of clean society, the original oil and gas industry is a new subversion. "
Immediately after Li Auto's IPO became promising, Meituan made an additional investment of USD 500 million on July 1, 2020. On July 10, Li Auto filed a prospectus with the SEC.
Deutsche Bank initiates coverage on Li Auto with Hold rating and $35 price target
(Source: Li Auto)
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