Sequoia China’s Neil Shen Reduces Meituan Shares Three Times in Five Days

Neil Shen, the Founding and Managing Partner of Sequoia China, has recently sold more Meituan shares, after previously reducing his holdings by 21.07 million shares and cashing out HK$3.9 billion ($496.86 million) in early July.

According to the documents disclosed by the Hong Kong Stock Exchange (HKEx), on July 21, Neil Shen sold 4.36 million shares at an average price of HK$193.1892. On July 22, he sold 82,500 shares at an average price of HK$191.1724. On July 25, he sold 2.1 million shares at an average price of HK$186.5201 per share, reducing his shareholding from 2.73% to 2.69%. He cashed out more than HK$1.2 billion within five days.

Neil Shen is the Founding and Managing Partner of Sequoia China. During his 17 years in charge, Sequoia China has focused on the internet technology track and has invested in more than 300 companies. Sequoia China first invested $12 million in Meituan‘s round-A financing. At that time, the company held 22.5% of its shares. Subsequently, Sequoia China continued to increase its investment in Meituan‘s round B, round C and round E.

In 2019 and 2020, Sequoia China mainly distributed shares to Limited Partners (LPs), and only sold a small amount of Meituan shares, cashing out about HK$225 million. Large-scale reductions began in 2021, and there were five reductions last year.

According to Meituan‘s financial report, in 2019, the actual net profit of Meituan was 2.236 billion yuan ($331.39 million), while the annual net profit in 2020 was 4.71 billion yuan. However, in 2021, Meituan‘s annual revenue was 179.1 billion yuan, a year-on-year increase of 56%, with a loss of 23.5 billion yuan during the period.

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In June this year, Meituan released its financial report for the first quarter of 2022. Revenue in the period was 46.3 billion yuan, up 25% year-on-year, while the operating loss reached 5.58 billion yuan, a year-on-year increase of 17.1%. The adjusted net loss was 3.59 billion yuan, a year-on-year decrease of 7.8%.