China’s Trip.com plans $1b Hong Kong secondary listing

Hong Kong. Source: Robert Bye/Unsplash

Trip.com Group, a Nasdaq-listed Chinese online travel company, could launch a secondary listing in Hong Kong valued at more than $1 billion as early as next week, according to two informed sources.

The company was given the go-ahead on Thursday by the listing committee of Hong Kong Exchanges and Clearing, the stock market operator. The company is preparing for preliminary discussions with potential investors before throwing open the offering for subscriptions, the sources familiar with the deal told Nikkei Asia.

“The transaction timeline is subject to market conditions,” one said. “We believe the shares should be well received as Trip.com should gain from a business revival as vaccinations across the world pick up pace.”

The Hong Kong Stock Exchange is closed from April 2 to April 6 for Easter and the Qingming holiday.

The share sale will follow disappointing openings for recent new listings in Hong Kong by mainland companies, and a global technology-sector sell-off that has roiled share valuations.

Online search engine Baidu’s secondary listing is trading 13% below its issue price since it began trading last month. Bairong, a Chinese financial technology company, slumped after debuting on Wednesday. Trip.com’s shares in New York have declined 11% since March 16.

Trip.com listed on the Nasdaq in 2003, and is valued at $23.8 billion. Based on Wednesday’s close, a 5% stake sale would raise $1.2 billion. However, the exact size of the auction will be determined after the preliminary investors meet, according to one of the Nikkei sources.

Trip.com Group serves clients through brands such as Trip.com, Ctrip and Skyscanner. It posted a $2 million loss from operations in the final quarter of 2020 compared to an $88 million profit in the same period in 2019.

Because of the COVID-19 pandemic, revenue fell 40% to $761 million for the quarter. Effective containment of the coronavirus in mainland China is reported to have led to a strong recovery in its domestic business.

Trip.com Group will be joining the so-called “homecoming” listings kicked off by Alibaba Group Holding in 2019.

Such listings have picked up momentum after the blacklisting of Chinese companies by U.S. authorities, including the treasury, defense and commerce departments and the Federal Communications Commission.

Under a law passed last year, Chinese companies also risk expulsion from American exchanges if U.S. regulators are not permitted to review their audit records. Beijing forbids such reviews on national security grounds.

Thirteen U.S.-listed Chinese companies have raised a combined $36 billion in Hong Kong through secondary listings since November 2019, according to Refinitiv, a financial data company.

According to market watchers, other U.S.-listed Chinese companies working on a Hong Kong listing include Tencent Music Entertainment Group; Weibo, a Twitter-like service; and Vipshop Holdings, an e-commerce company.

This article was first published on Nikkei Asia

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.