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China Tourism Group Duty Free prices IPO at HK$158, raising US$2.1 billion in Hong Kong’s biggest deal this year

  • China Tourism Group Duty Free has priced its IPO at HK$158 a share, raising US$2.1 billion of proceeds, according to a person familiar
  • The price is a 28 per cent discount to its A share closing price in Shanghai on Thursday

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China Tourism Group, which has big business in Hainan, has priced its Hong Kong IPO. Photo: Xinhua
Georgina LeeandEnoch Yiu

China Tourism Group Duty Free has priced its Hong Kong initial public offering at HK$158 per share, raising about US$2.1 billion (HK$16.2 billion) of proceeds in the city’s biggest IPO this year, according to a person familiar with the transaction.

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The final offer price is above the midpoint of the HK$143.50-HK$165.50 range the retailer marketed to investors. It will issue 102.8 million shares to investors, and trading is slated to begin on August 25 under the stock code “1880”. There is an option to sell a further 15.4 million shares if there is a strong demand.

The final offer price works out at roughly a 28 per cent discount to its Shanghai-listed shares, which clossed at 188.62 yuan on Thursday. The stock has dropped 14 per cent this year amid a flare-up in Covid-19 cases on China’s southernmost island Hainan, where the company has bet on domestic tourism.

The IPO by the world’s largest travel retailer by sales would still rank as Hong Kong’s biggest deal this year, surpassing the US$1.7 billion raised by Tianqi Lithium in July.

A dearth of sizeable IPOs this year has weighed on Hong Kong Exchanges & Clearing, with its first-half net profit tumbling by 27 per cent, its weakest interim report since 2017. Sizeable deals such as China Tourism Group Duty Free could help Hong Kong recover some ground lost to the Shanghai Stock Exchange.
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Shanghai’s tech board, known as the Star Market, was the world’s top IPO venue raising US$13.4 billion from 51 deals in the first six months this year, Refinitiv data shows. Hong Kong’s 22 IPOs, which raised just US$2.3 billion, is the lowest since the corresponding period in 2003.

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