Wang Xing, the CEO of Meituan and a non-executive director and major shareholder of Li Auto, has once again significantly reduced his stake in the company after almost a year.

According to disclosures by the Hong Kong Exchanges and Clearing Limited, from March 18 to 21 this year, Wang Xing sold a total of 6.5 million shares in Li Auto's Hong Kong stocks over four consecutive trading days, amounting to approximately HK$698 million.

This marks the fifth time Wang Xing has concentrated his stake reduction since Li Auto listed on the Hong Kong stock market in August 2021, and it is the largest reduction in terms of scale. However, cumulatively, these five reductions amount to 177.241 million shares, representing only 4.5% of his initial total holdings.

After this reduction, Wang Xing's total holdings of Li Auto's Class A ordinary shares decreased to approximately 374 million shares, and his percentage of the issued voting shares of this class dropped from 22.89% post-listing to 20.94%. This decrease also takes into account the slight dilution effect on his shareholding percentage due to the increase in the total size of Li Auto's Class A ordinary shares over the past few years.

Li Auto has yet to comment on Wang Xing's latest stake reduction. Wang Xing's previous stake reduction occurred at the end of March 2024, when he sold 4.1623 million shares of Li Auto's Hong Kong stocks over three trading days from March 26 to 28, amounting to approximately HK$503 million.

At that time, Li Auto responded: "Wang Xing sold his shares during the open window period, and the specific number of shares is subject to the equity declaration filed with the Hong Kong Exchanges and Clearing Limited. This transaction is an individual act, and the shares sold represent a very small portion of his total holdings and do not involve any shares held by Meituan." This response aligns with previous occasions when Wang Xing reduced his stake.

Based on Li Auto's prospectus and financial reports, Wang Xing's Class A ordinary shares before Li Auto's Hong Kong listing primarily consist of two parts, totaling approximately 391 million shares.

First, 258 million Class A ordinary shares held by Inspired Elite Investments Limited, a wholly-owned subsidiary of Meituan. These shares include 213 million Class D preferred shares subscribed by Meituan in Li Auto for US$500 million in July 2020 and 52.1739 million Class A ordinary shares subscribed for US$300 million in a private placement coinciding with Li Auto's IPO on the U.S. stock market at the end of that month.

Since Wang Xing is a director and controlling shareholder of Meituan, he is deemed to have an interest in Inspired Elite Investments Limited's shares. There has been no change in the portion of Li Auto shares held by Meituan's wholly-owned subsidiary.

Second, 133 million Class A ordinary shares beneficially owned by a trust indirectly controlled by Wang Xing, with TMF (Cayman) Ltd. as the trustee. These shares are held by TMF (Cayman) Ltd. through its controlled subsidiary, Songtao Limited, which is a subsidiary of Zijin Global Inc.

It's crucial to note that Zijin Global Inc.'s shares are divided into two parts: 132 million Class A ordinary shares and 1.37931 million Class A ordinary shares represented by 689,655 American depositary shares, all of which were sold in the first two concentrated stake reductions.

All of Wang Xing's previous five concentrated stake reductions in Li Auto came from this portion of his holdings. Currently, Wang Xing still holds 116 million Class A ordinary shares of Li Auto through Zijin Global Inc., accounting for 86.7% of his initial total holdings in this portion.

A review of Wang Xing's past stake reduction timelines shows that four out of the five concentrated stake reductions occurred in March, following the disclosure of Li Auto's previous year's annual report. The third reduction occurred in September, after the publication of Li Auto's 2023 interim report.

Hong Kong stock market rules prohibit directors of listed companies from buying or selling shares within 60 days before the annual report and 30 days before quarterly or interim reports. This limits the open window periods available for stake reductions.

Li Auto's management typically reduces its own shares during the window periods in September and December. Among them, President Ma Donghui and CFO Li Tie (both executive directors of the company) previously reduced their stakes simultaneously in mid-December 2023 and 2024. Non-executive director Fan Zheng's only stake reduction occurred at the end of December 2022. Former President Shen Yanan's stake reductions were concentrated in December 2021 and September 2022.

Since his initial investment in Li Auto in August 2019, to the final strategic financing before Li Auto's IPO on the U.S. stock market in July 2020, Wang Xing personally invested a total of US$335 million.

Roughly calculated, after five concentrated stake reductions, Wang Xing has cashed out approximately HK$2.143 billion, recovering over 80% of his initial investment. Based on the closing price of HK$102.7 per share on the Hong Kong stock market on March 26 this year, the remaining 116 million shares held by Wang Xing are worth approximately HK$11.867 billion.

Li Auto's latest financial report shows that revenue in 2024 increased by 16.6% year-on-year to RMB144.46 billion, surpassing the RMB100 billion mark for the second consecutive year. Net profit decreased by 31.9% year-on-year to RMB8.05 billion, maintaining profitability for the second consecutive year. As of the end of the reporting period, the company's cash reserves reached RMB112.8 billion, maintaining growth of over RMB10 billion year-on-year and quarter-on-quarter.