Online travel agency Trip.com made a strong debut in Hong Kong on Monday, with shares rising more than 4% from their issue price in afternoon trade.
The China-based company now joins other U.S.-listed Chinese tech heavyweights such as Alibaba, JD.com and Baidu that have returned closer to home via secondary offerings in Hong Kong. It priced its initial public offering at 268 Hong Kong dollars per share, and raised 8,478 million Hong Kong dollars ($1.09 billion) assuming the over allotment option is not exercised.
The secondary listing comes as Chinese tech companies continue to face the threat of being delisted in the U.S., clouding investor sentiment.
James Liang, executive chairman of Trip.com Group, told CNBC the “main reason” for the company’s secondary listing in Hong Kong was to make it more convenient for global investors in Asia and China to trade its stock.
“Most of our customers are in Asia, I think it’s actually pretty natural for us to (be) listed in Hong Kong,” he said Monday in an interview with CNBC’s “Street Signs Asia.”
Even as much of the global travel market continues to falter due to the coronavirus pandemic, Trip.com expects a “record number of travelers in China” during the upcoming long holiday in May.
“This May holiday we already have … some of the number(s) coming in and we’re looking at record number of travelers in China — probably even double digit growth from the pre-Covid levels,” according to Liang. The Labor Day holidays run from May 1 to 5 in China.
In particular, higher end accommodation such as resorts and short distance travel are expected to see “very, very fast growth” that could actually more than offset the decline in international travel, Liang projected.
An employee walks through the reception area at the Trip.com Group Ltd. headquarters in Shanghai, China, on Thursday, Feb. 4, 2021.
Qilai Shen | Bloomberg via Getty Images
“The money that people save from buying the international air ticket, people spend on hotels especially high-end hotels and cars, you know, local transportation,” he said. “Even though the total transaction amount may not be reaching a record level, but then in terms of number of travelers and in terms of the margins, we’re very optimistic.”
China was the first country to report about the coronavirus pandemic. Following strict lockdown measures that were instituted across the country weeks after the earliest Covid-19 cases emerged in Wuhan city late 2019, the country largely managed to contain the virus’ spread and emerged in 2020 as one of the few major economies that expanded that year.
By contrast, authorities in other countries continue to wrestle with inoculating their populations in the face of increasing virus infections and potential mutations.
One example is India which has experienced a second wave of coronavirus infections since February that last week overtook Brazil to become the second worst- affected country in terms of cases, behind only the U.S.