Chinese tech stocks rise after Meituan was fined antitrust law

GUANGZHOU, China – Meituan stock rose over 8% on Monday despite the $ 500 million antitrust fine on the grocery supplier for not being as high as expected.

“The Meituan fine was actually lower than expected,” said Ken Wong, specialist in Asian equity portfolios at Eastspring Investments, on Monday to CNBC’s “Street Signs Asia”.

On Friday, China’s State Administration of Market Regulation (SAMR) said Meituan had abused its dominant position in the country’s online grocery delivery market. The market regulator said Meituan has urged traders to enter into exclusive cooperation agreements with them and taken punitive measures for those who fail to do so.

The SAMR fined Meituan 3.44 billion yuan ($ 534.3 million), ordered her to take corrective action, and completed a month-long investigation.

Meituan closed more than 8% in Hong Kong trading, while other Hong Kong-listed Chinese technology stocks were also broadly higher. Tencent ended the day up 2.9%, while Alibaba was up nearly 8%.

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“Overall, the Chinese stock markets are definitely … a lot more attractive compared to most other countries here in Asia,” said Wong of Eastspring Investments.

“The Chinese markets … are trading at much lower valuation levels,” he said. “We see investors doing a little bottom fishing.”

Wong said any positive sentiment from China towards the tech sector should lead to “more buying” of the relevant stocks.

China has been scrutinizing its domestic tech companies over the past year, wiping billions of dollars in value from technology stocks in the process.

Regulators have focused on tightening unfair competition and data protection rules, but have gone further than other jurisdictions by focusing on regulatory algorithms.

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