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China Tourism Group Duty Free gets approval for IPO, targets biggest Hong Kong listing this year at US$2.7 billion

  • The company’s flotation has received approval from the Hong Kong stock exchange’s listing committee
  • The company’s mainland shares have dropped this week as Covid-19 restrictions hit the duty-free shopping haven of Sanya in Hainan province

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Customers select products in a duty-free shopping mall in Haikou, in south China’s Hainan Province, on October 4, 2020. Photo: Xinhua
Iris Ouyang,Georgina LeeandEnoch Yiu

China Tourism Group Duty Free has received approval from the Hong Kong stock exchange’s listing committee for its flotation on the main board, according to a filing late on Tuesday.

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The company will start book building as soon as Friday and aims to raise around US$2.7 billion in what could be the biggest initial public offering (IPO) in the city this year, according to market sources.

The company’s mainland stock has lost at least 7.8 billion yuan (US$406 million) in market value so far this week as Covid-19 disruptions took hold in Hainan province.
This marks the second attempt by the world’s largest travel retailer by sales to sell shares in Hong Kong, after it shelved the plan in December, citing sluggish market conditions.
Customers peruse jewellery in a duty-free shop in Haikou, capital of south China’s Hainan Province, on January 14, 2022. Hainan is expected to account for half of the US$40 billion duty-free market by 2025. Photo: Xinhua
Customers peruse jewellery in a duty-free shop in Haikou, capital of south China’s Hainan Province, on January 14, 2022. Hainan is expected to account for half of the US$40 billion duty-free market by 2025. Photo: Xinhua

The Shanghai-listed company is hoping to capture more of the billions of dollars Chinese consumers are spending in the tax-free shopping zone on Hainan island, a revenue source that has gained more importance as the country’s zero-Covid policy continues to limit international travel.

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The company operates five duty-free shops in Hainan and has one under construction in the provincial capital, Haikou. It also operates the world’s biggest duty-free complex in Sanya and accounts for about 90 per cent of the market there. Hainan is expected to account for half of a US$40 billion duty-free market by 2025.
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