Home Business China Tourism shares tank 24% before closing flat in Hong Kong debut

China Tourism shares tank 24% before closing flat in Hong Kong debut

7 min read
Comments Off on China Tourism shares tank 24% before closing flat in Hong Kong debut
0
46


Article content

HONG KONG — Shares of China Tourism Group Duty Free Corp opened down 24% at its Hong Kong debut on Thursday, but rallied to close flat after the listing raised $2.1 billion in the financial hub’s largest such exercise in 2022.

China Tourism is a major duty-free network operator in mainland China, with 200 duty free stores in China, Hong Kong, Macau and Cambodia, its filings show.

Article content

The stock opened at HK$120, versus the offer price of $HK158 in the deal, but then bounced to trade down 0.48%. The company’s debut was delayed until 0500 GMT after the Hong Kong Stock Exchange trading session was shortened because of a typhoon.

Advertisement 2

Article content

The stock closed at HK$158, underperforming the benchmark Hang Seng Index, which gained 3.53%. Its Shanghai listed shares gained 1.6%.

Refinitiv data showed 6.7 million China Tourism shares, worth HK$1.05 billion, were traded during the session.

Shanghai-listed China Tourism sold 102.76 million shares in the listing.

The company priced its shares at the upper end of the HK$143.50 to HK$165.50 range flagged when the deal was launched this month. That price represents a discount of about 35% to the trading value of the Shanghai listed stock.

“The pricing was expensive, given the ongoing COVID-19 outbreak in China, and deteriorating profitability of the company,” said Shifara Samsudeen, a LightStream Research analyst who publishes on Smartkarma.

Advertisement 3

Article content

“The Hong Kong shares are trading around the listing price and we expect the share price to drop further in the coming days, as the outlook on the travel retail sector is bleak, given the slowdown in global economies.”

Institutional investors subscribed for 4.7 times the number of shares on offer in the international tranche of the deal, the firm’s filings showed.

The deal’s bookbuild was carried out as Hainan, the company’s biggest mainland market, was locked down due to a COVID-19 outbreak.

China Tourism’s listing takes to $6.7 billion the amount raised in Hong Kong in initial public offerings and secondary listings so far in 2022, down 80.7% on the same last year, Refinitiv data shows.

It is the year’s slowest start for the city’s equity capital markets since 2013, the data showed. (Reporting by Scott Murdoch and Donny Kwok; Editing by Christopher Cushing and Clarence Fernandez)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.



Source link

Load More Related Articles
Load More By 
Load More In Business
Comments are closed.

Check Also

year JGB yield falls, longer-term notes keep rising

Article content TOKYO — The Japanese government bond market moved in mixed directions on W…