Yahoo Finance Meituan, Tencent Plunge As China Warns Food Delivery Firms on Workers' Rights
By Dhirendra Tripathi
Investing.com – Meituan (OTC:MPNGY) stock slumped nearly 14% in Hong Kong (HK:3690) trading Monday after Chinese authorities warned food delivery companies about their obligations to pay workers at least the national minimum wage.
Payment of minimum wages could mean higher costs for China’s largest food delivery app, owned 17% by Tencent Holdings (OTC:TCEHY) which also fell nearly 8%.
The State Administration for Market Regulation posted a notice Monday asking meal delivery operators to respect the rights of delivery staff. Online food platforms must ensure that delivery workers earn at least the local minimum income, newswires reported.
The news comes hot on the heels of a separate initiative forcing the country's online learning providers to operate on a not-for-profit basis, leaks of which prompted the ADRs of Chinese online education providers to lose more than half their value. TAL Education (NYSE:TAL) lost nearly 71% Friday and was down 21% today in premarket. GSX Techedu (NYSE:GOTU) and New Oriental Education (NYSE:EDU) lost 63% and 54% respectively Friday and were down 25% each in premarket.
The two initiatives broaden and intensify the regulatory pressure that Chinese tech companies have been subjected to since the government forced financial services giant Ant Group to abandon its initial public offering late last year.
More recently, the Cyberspace Administration of China said it would subject any substantial Chinese company to a stringent review of its data policies before it would approve a listing in the U.S., a move that threatens to close the world's biggest capital market to some of China's fastest growing companies.
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Meituan, Tencent Plunge As China Warns Food Delivery Firms on Workers' Rights
