Online travel agency Trip.com made a strong debut in Hong Kong on Monday. The shares rose by more than 4% compared to the issue price in afternoon trading.
The China-based company is now joining other US-listed Chinese tech heavyweights like Alibaba, JD.com and Baidu, who have moved closer to their homeland via second deals in Hong Kong. The IPO was valued at $ 268 Hong Kong per share and $ 8,478 million (US $ 1.09 billion) was raised unless the over-allotment option is exercised.
The secondary listing comes as Chinese tech companies continue to face the risk of being delisted in the US, which clouded investor sentiment.
This May vacation we already have … some of the inbound people and we’re seeing a record number of travelers in China – likely double digit growth from pre-Covid levels.
Chairman of the Board of the Trip.com Group
James Liang, CEO of Trip.com Group, told CNBC that the “main reason” for listing the company as a secondary listing in Hong Kong was to make it easier for global investors in Asia and China to trade stocks.
“Most of our customers are in Asia. I think it’s pretty natural for us to be listed in Hong Kong,” he said in an interview with CNBC’s Street Signs Asia on Monday.
“Very optimistic” about the May vacation
Even if much of the global travel market continues to stall due to the coronavirus pandemic, Trip.com expects a “record number of travelers in China” for the long vacation ahead in May.
“This May vacation, we already have … some of the numbers that are coming in, and we’re seeing a record number of travelers in China – likely double-digit growth from pre-Covid levels,” Liang said. Labor Day holidays are May 1-5 in China.
In particular, upscale accommodations like resorts and short-haul travel are expected to see “very, very rapid growth” that could actually more than offset the decline in international travel, Liang predicted.
An employee walks through the reception area at the headquarters of Trip.com Group Ltd. on Thursday, February 4, 2021. in Shanghai, China.
Qilai Shen | Bloomberg via Getty Images
“The money people save by buying international airline tickets is what people are spending on hotels, especially high-end hotels and cars, you know, on local transport,” he said. “While the total transaction amount may not hit record levels, we are very optimistic about the number of travelers and margins.”
China was the first country to report on the coronavirus pandemic. After tight lockdown measures launched across the country weeks after the earliest Covid-19 cases occurred in Wuhan city in late 2019, the country largely managed to contain the spread of the virus and stepped as one of the few major economies in 2020 that expanded this year.
In contrast, authorities in other countries continue to struggle to vaccinate their populations in the face of increasing viral infections and potential mutations.
One example is India, which has seen a second wave of coronavirus infections since February and overtook Brazil last week to become the second worst affected country after the US, just behind the US