Trip.com Brings Its Shares Home With $1.3 Billion Hong Kong IPO
Leading Chinese travel agent Trip.com Group Ltd. is en route to a secondary listing in Hong Kong, hoping to sell investors on a rebounding tourism sector in its home market as it joins a train of New York-listed Chinese firms seeking alternate trading footholds closer to home.
The Shanghai-based operator of several ticket- and hotel-booking platforms on Wednesday announced plans to issue 31.6 million new shares in the IPO, which is expected to take place on April 19, according to a company filing to Hong Kong Stock Exchange.
It has set the top end of its price range at HK$333 ($42.79), meaning it could raise up to HK$10.5 billion from the deal. The final price will be determined on April 13, which will include consideration of the price of its U.S.-listed American depositary shares (ADSs), it said.
The company will earmark 45% of the IPO proceeds to expand its portfolio of online travel platforms and products, as well as improving users’ experience and further boosting its user base. Another 45% will be used to fund research and development of new technologies like artificial intelligence and big data algorithms.
Retail investors will get 7% of shares being sold, while institutional investors will get the rest.
The company’s Hong Kong IPO is part of a broader trend of U.S.-listed Chinese internet companies tapping alternative capital markets closer to home, partly due to deteriorating relations between Beijing and Washington.
New York-listed Chinese video sharing platform Bilibili Inc. made a secondary listing in Hong Kong last week, following a similar move by internet giant Baidu Inc. last month. E-commerce behemoth JD.com and NetEase Inc. also made Hong Kong secondary IPOs last June.
Trip.com, formerly known as Ctrip, may have held back on its listing while waiting for improvement in the domestic and international travel sectors, which have been hamstrung by the pandemic.
The situation in Trip.com’s home China market is showing signs of recovery as restrictions imposed during the pandemic have been largely eased across the country. But cross-border travel remains low as the pandemic continues overseas.
During China’s three-day Tomb-Sweeping Day holiday, which ended Monday, Trip.com said it sold 232% more tickets to attractions than during the same period in 2019, and 40% more hotel bookings. Across the country, travelers made 102 million domestic trips during the holiday, equivalent to 94.5% of the number during the 2019 holiday before the pandemic.
Trip.com, which serves clients through brands such as Trip.com, Ctrip and Skyscanner, made a net profit of 1 billion yuan ($153 million) in the fourth quarter of last year, or half the level for the same period in 2019. Its revenue took a 40% nose dive year-on-year to 5 billion yuan.
All four of its major businesses of hotel bookings, transportation ticketing, package tours and corporate travel bookings suffered serious contraction in the final quarter of last year, according to the company’s latest quarterly report.
The company’s Hong Kong listing also comes as relations remain tense between the U.S. and China over access by the U.S. securities regulator to the accounting records of New York-listed Chinese companies.
Last month, the U.S. Securities and Exchange Commission (SEC) said it was moving ahead to force accounting firms to give it access to review audits of overseas companies under the Holding Foreign Companies Accountable Act, which is set to go into effect on April 23.
Companies that fail to comply by releasing their last three years of audited results to U.S. regulators could be delisted from the New York Stock Exchange or Nasdaq.
Contact reporter Anniek Bao (email@example.com) and editor Yang Ge (firstname.lastname@example.org)
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