Meituan deliverymen take a break along a road in Beijing. Photo: cnsphoto

The stock price of Meituan-Dianping (Meituan), a Chinese group buying platform, soared to HK$172 ($22) per share on Tuesday, with its total market capitalization exceeding HK$1 trillion. Analysts said the reason for its dramatic increase is the trend for digitalization of service and catering businesses and the rise in takeaway orders amid the coronavirus outbreak.

Meituan's share price rose by more than 2 percent on Tuesday morning, and then climbed all the way to HK$172.5 per share in the afternoon, with its total market value reaching HK$1001.8 billion, equivalent to 915 billion yuan, as of press time.

If converted into the A share market, it would rank 7th, after Bank of China but surpassing China Merchants Bank and China National Petroleum Corporation, Securities Times reported on Tuesday.

Meituan has become the third-largest listed internet company after Alibaba and Tencent in Hong Kong, according to the latest rankings of total market capitalization.

Meanwhile, the rise of Meituan has also helped its founder Wang Xing grow in wealth. As of 8 pm on Tuesday, Wang had surpassed JD.com's Liu Qiangdong in Forbes' Real-Time Billionaires rankings. Wang is worth $13.5 billion, making him the 117th richest man in the world, according to Forbes' website.

This came after the company released a quarterly report in late May showing that due to the COVID-19 epidemic, the operating income for the first quarter decreased by 12.6 percent year-on-year to 16.8 billion yuan and the loss was 1.7 billion yuan.

Meituan has a share of more than 60 percent of the market for internet life services, and although its performance has declined slightly during the course of the epidemic, it has exceeded expectations, analysts said.

Zhao Jingqiao, executive director of the research center for the services economy and catering sector under the Chinese Academy of Social Sciences, told the Global Times on Tuesday that the increase in market capitalization for Meituan reflects the expectations of investors for the digitalization of the service and catering industry in China.

"Given the bigger picture of the significant increase of public income in third and fourth-tier cities as well as the digitalization of small, medium and micro enterprises in the services sector, Meituan, as one of the leading online delivery platforms, will see more space for growth ahead," Zhao said, adding that the outbreak presents an opportunity for Meituan to accelerate the promotion of online services, especially the catering business when restaurants see a shrinking demand for eat-in service.

Meituan's food and delivery business continued to maintain strong growth in 2019, with transaction volume rising 38.9 percent year-on-year to 392.7 billion yuan, according to Meituan's financial report released on March 30.

Given the 4.5 trillion yuan total revenue in the domestic catering industry last year, Meituan still has room for growth, Zhao said.