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Published: 15:42, August 12, 2022 | Updated: 17:40, August 12, 2022
China Tourism eyes HK's largest IPO in 14 months
By Wang Yuke
Published:15:42, August 12, 2022 Updated:17:40, August 12, 2022 By Wang Yuke

A woman sits in front of Exchange Square (left) which houses the Hong Kong Stock Exchange in Hong Kong on April 27, 2022. (DALE DE LA REY / AFP)

China Tourism Group Duty Free Corp Ltd is aiming to raise up to $2.5 billion in Hong Kong, which would make it the largest share sale in Hong Kong in 14 months.

CTGDF, the Shanghai-listed China Tourism is reported to be selling 102.76 million shares priced between HK$143.5 ($18.32) and HK$165.5 each, according to a term sheet available.

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Nearly 40 percent of the stock on offer in the deal has been sold to nine cornerstone shareholders who will invest a total of about $795 million, in an attempt to secure the IPO, according to a term sheet available  

The stock sale would be Hong Kong's largest initial public offering since the $2.06 billion dual primary listing by the electric carmaker Xpeng in June 2021.

Nearly 40 percent of the stock on offer in the deal has been sold to nine cornerstone shareholders who will invest a total of about $795 million, in an attempt to secure the IPO, according to the term sheet.

Leading the cornerstone investors is the China State-Owned Enterprise Mixed Ownership Reform Fund, which claimed a HK$1.2 billion stake, followed by the South Korean cosmetics producer AmorePacific Group, China’s state shipping firm Cosco Shipping, and Rongshi International, each with HK$785 million, the term sheet showed.

CTGDF looks to set the final price on Aug 18, the term sheet said, and the Hong Kong stock will start trading Aug 25.

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As a matter of fact, CTGDF’s business has borne the brunt of the pandemic-led industry disruptions and chaos on the Chinese mainland in the first half of the year, registering a 26 percent decline in net profit.

For the first six months, the Chinese retailer’s net profit was 3.94 billion yuan ($584.8 million), a significant decline from 5.36 billion yuan a year earlier, it said in a filing last month.

At the same time, its revenue slid 22 percent to 27.65 billion yuan.

After a rash of store closures, the retailer is gradually resuming the business of its stores across the Chinese mainland, with 26 percent of  its brick-and-mortar stores having recovered operations by the time CTGDF resubmitted an application for an H-share listing on the Hong Kong stock market on Aug 2. This is the world’s largest travel retailer's renewed attempt to sell shares in Hong Kong after it shelved its plan in December because of the grim pandemic situation and bleak market. Currently, 63 percent of its stores remain shut.

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The company has a positive outlook on its post-pandemic operations, reporting that its operating income in June marked a year-over-year growth by 13 percent.

The company operates five duty-free shops in Hainan province. It also operates the world's biggest duty-free complex in the Hainan city of Sanya.

There are over 190 duty free stores for airports, flights, borders, passenger depots, railway stations and others, scattered around in the Chinese mainland, as well as Southeast Asia.


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