Meituan is evaluating a new sale of offshore yuan notes in the near term, according to people familiar with the plan who asked not to be named because the talks are private. The company has received the green light from Chinese authorities to proceed, and it did not respond to a request for comment. Funds would go toward general corporate purposes.
If it goes ahead, this would be Meituan's second-ever dim sum deal, following its debut in the offshore yuan market about a year ago. The firm first tapped dollar bonds in 2020 with a $2 billion transaction.
Borrowing in yuan offshore has become more attractive thanks to lower funding costs. According to Bloomberg data, sales by government and corporate borrowers have exceeded 1 trillion yuan - equal to roughly $150 billion - in dim sum bonds issued beyond mainland China this year, setting a record pace. Earlier this month, Tencent sold 26 billion yuan of such bonds, and that yuan portion topped the dollar tranche within the same offering for the first time.
Last year, Meituan brought in about $3 billion via dollar debt and offshore yuan bonds, marking its largest regular bond issuance to date.
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The prospective sale comes at a time when rivalry in China's food delivery and retail markets has eased somewhat after a regulatory crackdown, following years when fierce competition pressured the sector that Beijing views as key to stimulating consumer spending. In August, Meituan posted a surprise profit for the quarter, and it has slowed its push overseas. Like many Chinese tech names, the company has built large language models for AI, called LongCat, though it is not updating its AI products as quickly as Alibaba Group Holding Ltd. or ByteDance Ltd.
The bottom line: if Meituan taps cheaper offshore yuan funding while industry pressures ease and expansion remains measured, its financing costs could trend lower - a setup worth tracking for your portfolio.
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