China Tourism seeks $2.16 bln in Hong Kong’s largest itemizing thus far in 2022 – time period sheet

HONG KONG — China Tourism Group Responsibility Free Corp is aiming to lift as much as $2.16 billion by way of a brand new itemizing in Hong Kong, in accordance with a time period sheet reviewed by Reuters, in what would be the largest share sale within the metropolis thus far this 12 months.

Shanghai-listed China Tourism is planning to promote 102.76 million shares priced between HK$143.50 and HK$165.50 ($18.30 and $21.10) every, the time period sheet mentioned.

The provide has already been absolutely subscribed, in accordance with two individuals with direct data of the matter. The sources spoke on situation of anonymity as a result of they weren’t licensed to debate the matter with media.

China Tourism, which has constructed the biggest duty-free retail community in China, didn’t reply to a request for touch upon the deal’s launch or subscription price.

The launch of the deal comes as Hainan island, in China’s south the place China Tourism has a number of main procuring shops, stays underneath tight restrictions attributable to an outbreak of COVID-19.

The value vary represents a 29.3% to 38.7% low cost to the inventory’s 201.19 yuan closing value on Thursday in Shanghai. The Shanghai shares fell 3.1% on Friday after the Hong Kong deal was launched.

Hong Kong share gross sales of Chinese language-listed firms are sometimes provided at a reduction to entice traders to purchase the inventory however the flagged low cost of China Tourism is larger than regular. The speed was chosen to assist make sure the inventory trades positively within the secondary market, one of many sources with direct data advised Reuters.

China Tourism’s Shanghai-listed shares have recovered most of their losses since lockdowns throughout Hainan started to be ordered final week. Its shares are down 11% year-to-date.

China Tourism plans to set the ultimate value subsequent Thursday, the time period sheet mentioned, and the Hong Kong inventory will begin buying and selling Aug. 25.

Nearly 40% of the inventory on provide within the deal has been bought to cornerstone shareholders who will make investments about $795 million, in accordance with the time period sheet.

Sanya, a vacation metropolis on the southern finish of Hainan island on the heart of the COVID outbreak, reported 1,690 symptomatic and 1,504 asymptomatic instances from Aug. 1 by way of Aug. 10.

The duty-free store operator’s deal, if executed, would surpass Tianqi Lithium’s $1.71 billion deal, which opened in late June, to turn out to be the largest share sale in Hong Kong in 2022.

Tianqi’s Hong Kong shares had been priced at a 50% low cost to its Shenzhen inventory and are buying and selling solely marginally larger because it debuted in mid-July.

“After the tepid efficiency by Tianqi Lithium, the one method they may get away with the China Tourism deal was by providing it at an honest low cost,” mentioned Aequitas Analysis director Sumeet Singh, who publishes on Smartkarma.

“If it does go properly different offers ought to comply with because the pipeline for Hong Kong offers is now pretty full and must get transferring quickly.”

There was $4.9 billion value of preliminary public choices and secondary share gross sales within the metropolis this 12 months in comparison with $34.7 billion on the similar time final 12 months, in accordance with Dealogic knowledge.

It’s the slowest year-to-date for brand spanking new listings since 2009.

($1 = 7.8432 Hong Kong {dollars}) (Reporting by Scott Murdoch; Enhancing by Stephen Coates, Lincoln Feast and Kenneth Maxwell)