Meituan's Wang Xing Sells 5.7M Li Auto Shares, Reduces Stake to 20.61%

Meituan's CEO, Wang Xing, has once again reduced his stake in Li Auto, the electric vehicle manufacturer. According to the Hong Kong Stock Exchange's disclosure of equity, from June 10 to June 13, Wang Xing cumulatively sold 5.7357 million shares of Li Auto, realizing a total of approximately 652 million Hong Kong dollars. His stake in the company decreased from 20.94% to 20.61%.

This is the second time this year that Wang Xing has consecutively reduced his stake in Li Auto. Previously, from March 18 to March 21, he sold 6.5 million shares over four trading days, realizing approximately 700 million Hong Kong dollars. His stake decreased from 21.3% to 20.94%, but he remains a significant shareholder in Li Auto.

Wang Xing has been reducing his stake in Li Auto over the past few years. In April 2022, he sold shares worth over 500 million Hong Kong dollars, reducing his stake from 21.76% to 21.53%. Li Auto responded to the sale, stating that the transaction was a personal decision and did not involve Meituan's shares. Wang Xing had also praised Li Auto's new model, the Li L6, on his social media, highlighting its design and production process.

Wang Xing and Meituan are significant investors in Li Auto. Wang Xing and Meituan's subsidiary, Dragon Ball Capital, have invested in Li Auto multiple times. Post-IPO, Meituan and Wang Xing collectively held 24% of Li Auto's shares, with Wang Xing personally holding 7.9% and Meituan's Inspired Elite holding 16.1%. In comparison, Li Auto's founder and CEO, Li Xiang, holds 21% of the shares but has 72.7% of the voting rights.

Li Auto's latest quarterly report shows that the company's revenue for the first quarter of 2023 was 25.93 billion yuan, a 1.1% increase year-on-year but a 41.4% decrease quarter-on-quarter. The net profit was 646 million yuan, a 9.4% increase year-on-year but an 81.7% decrease quarter-on-quarter. Li Xiang, during the earnings call, mentioned that Li Auto plans to introduce MPVs and sedans based on market demand, in addition to its extended-range and pure electric SUVs, to meet both domestic and international market needs. Li Auto's revenue for 2022 was 144.5 billion yuan, still some distance from the 300 billion yuan target.

Wang Xing and Meituan are currently facing competition from JD.com in the food delivery sector. In response to JD.com's 10 billion yuan subsidy for its food delivery business, Wang Xing stated that Meituan would not hesitate to win the competition. He expressed confidence in Meituan's ability to overcome intense competition, as it has done in the past. Meituan welcomes new players in the market and acknowledges the industry's potential but is concerned about irrational subsidies leading to low-quality and low-price competition.

Meituan clarified that its statement about taking all necessary measures refers to opposing "low-price, low-quality competitive pressure." Meituan will continue to invest in the industry's ecosystem, including rider welfare and merchant support, to promote healthy industry development.