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HK float gives fillip to Trip's Asia play

By HE WEI in Shanghai | China Daily | Updated: 2021-04-20 09:41
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Trip.com employees manage a booth during the third China International Import Expo in Shanghai in November. [Photo provided to China Daily]

After making its secondary listing in Hong Kong on Monday, Nasdaq-listed Chinese mainland online travel agency Trip.com Group Ltd said it aims to tap into more Asian investors and customers.

Priced at HK$268 ($34.5), the stock jumped 4.55 percent to HK$281.2 in Hong Kong on Monday.

Its Nasdaq-listed shares closed at $36.51 on Friday. Way back in 2003, Trip made its IPO on the Nasdaq stock market. The company operates travel booking sites such as Ctrip.com, Qunar and Skyscanner.

Trip executives said after a listing ceremony in Shanghai that the company now expects robust growth in China's travel market.

Trip is also confident that global travel will likely rebound whenever the COVID-19 pandemic subsides, they said.

The company said in a news release it hopes to use net proceeds from the Hong Kong float to fund the expansion of one-stop travel offerings, improve user experience, invest in technology to bolster its market-leading position in products and services, and improve operational efficiency.

Liang Jianzhang, Trip's co-founder and chairman, likened tourism to people's "unsaturated "spiritual pursuit, and concluded that tourism should be an industry with fast and stable growth.

"The hurdles brought by the pandemic are (going to be) only temporary," said Liang during the ceremony in Shanghai. "We can't live without traveling, and our goal is to make traveling inseparable from Trip."

The company has felt the pinch of the drastic pandemic-related decline in global travel. According to the prospectus filed with the Hong Kong stock exchange, Trip's net revenue for 2020 dropped 49 percent year-on-year to 18.3 billion yuan ($2.81 billion).

Still, its US-listed shares jumped 60 percent in the past year, largely fueled by resumption of domestic travel in China.

Liang said the emphasis from now on will include promoting rural and countryside travel plans in China. Domestic travel and short trips to neighboring areas will also "enjoy robust absolute growth".

The company recently unveiled plans to boost its content ecosystem and partner marketing capabilities with the launch of a new travel marketing strategy.

It is designed to allow suppliers to expand and enhance their marketing activities on Trip's various platforms.

The company is also eyeing a stronger foothold in the international travel segment. Trip sees room for big growth in the segment where its market share is just 2 percent now, Liang said.

Agreed Sun Jie, Trip's chief executive officer. "We anticipate the fastest growth over the next decade to come from Asia. We will expand the brand, engage with Asian customers and partners and expand our investor base in Asia."

The unexpected pandemic has rattled the global travel market, which contracted last year by more than 50 percent to $2.6 trillion, from $5.8 trillion in 2019, according to a research report from consultancy Analysys.

But the study expects the industry to rebound to pre-pandemic levels in 2022, driven by the rollout of COVID-19 vaccines, as well as rising consumer spending power, especially from emerging markets such as Asia.

Chen Liteng, an analyst at the Internet Economy Institute, a consultancy, said Trip rode the wave of secondary listings in Hong Kong created by Chinese mainland tech companies such as Alibaba and Bilibili to hedge against uncertainties amid Washington's increasing scrutiny of Chinese-listed firms.

"The choice of Hong Kong is in line with Trip's strategy to focus on the domestic market while eyeing international expansion.

"But the growth pace of its revenue over the years has seen a gradual decline, owing to a combination of factors, including a growing number of domestic rivals backed by internet giants or international peers such as Expedia and Booking."

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