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Sources: Trip.com (Ctrip) Aims to Raise $1.09B in Hong Kong Secondary Listing

Trip.com (formally Ctrip) has been successful in raising $1.09B after the company prices the shares at HK$268 each, according to internal sources. [sources trip.com ctrip 1.09b hong kong]

Key Takes:

  • Trip.com has raised over $1.09 billion in its Hong Kong secondary listing by selling 31.6 million shares at HK$268 per share
  • One American depositary share (ADS) of Trip.com is equal to one ordinary share of the company, making it easier for U.S. investors to invest in foreign companies
  • The Hong Kong listing acts as insurance against being delisted from U.S. stock exchanges and makes it easier for Asia-based investors to invest in the company
  • JD.com, Alibaba Group, and Trip.com are among the U.S.-listed Chinese companies that have raised over $36 billion from the Hong Kong stock market in 2019
  • The joint sponsors for Trip.com’s listing are China International Capital Corp., JPMorgan Chase & Co., and Goldman Sachs Group Inc.

In its Hong Kong second listing, the online travel-booking platform Trip.com has raised over $1.09 billion or HK$8.5 billion after the company went public pricing its shares at HK$268 per share.

As Trip.com goes public and sells shares on its Hong Kong listing, the travel website successfully sold around 31.6 million shares, as per a statement shared on Bloomberg. 

The new price was 2% lower than the previous day’s closing price of $35.20 per share. This means that if someone bought shares at the new price, they would be getting a discount of 2% compared to the previous day’s price.

This means that if someone bought shares at the new price

“22 years ago, we began in a 40m2 office with only a handful of employees. Today, we have tens of thousands of employees worldwide. It is my honor to have our representative users strike the gong and open trading on this momentous occasion. I want to thank every single customer, partner, sponsor, and traveler who has supported us throughout our 22-year journey,” said co-founder of Trip.com, James Liang, in the listing ceremony.

“By being dual-listed in the US and Hong Kong, we are able to have a truly global offering that better reflects our international presence and outlook,” he added. 

One ADS (American depositary shares) of Trip.com is equal to one ordinary share of the company. This allows investors in the United States to easily invest in foreign companies without having to deal with foreign currencies or other logistical issues. The company has now announced that these shares will also be available for trading in Hong Kong starting from April 19th. [sources trip.com ctrip 1.09b hong kong]

Similarly, the US shares of the travel company have seen significant growth in 2021. That year, the US shares were up 4% as the company bagged a market cap of $21 billion. According to data shared by Bloomberg, US-listed Chinese companies are successfully dominating the Hong Kong stock market as well.

Some of the big names that fit the scenario are JD.com, Alibaba Group Holding Ltd., and Trip.com. The data shares by Bloomberg also suggest that these companies have raised over $36 billion dollars in 2019 alone from the Hong Kong stock market. [sources trip.com ctrip 1.09b hong kong]

The U.S. Securities and Exchange Commission (SEC) has recently implemented a new law that requires overseas companies listed on U.S. stock exchanges to allow American regulators to inspect their audits. If a company fails to comply with this requirement, it could be delisted from the U.S. stock exchange. By listing its shares in Hong Kong, the company can comply with this requirement and still have its shares available for trading.

As the Sino-US tensions were up, the Hong Kong listing will also act as insurance and eliminate the risk of being kicked off the US stock exchange. Another reason for this listing is to make it easier for investors in Asia to invest in the company’s shares.

It is noted that Trip.com isn’t the first Chinese company to go for a second listing. Recently, Bilibili Inc. and Baidu Inc. were seen going for second listing but unfortunately for these two, they did not perform as well as similar listings from the previous year. 

This may be because investors did not see much growth potential in tech stocks at the time and they shifted to other stocks. However, the prices of technology stocks have since recovered, as seen by the rise of the Nasdaq Composite Index.

Trip.com, however, is another case. The company has been successful in not only going for a second listing, but also managing to sell 31.6 million shares, and raising over 1.1 billion dollars. The listing was jointly sponsored by China International Capital Corp., JPMorgan Chase & Co., and Goldman Sachs Group Inc.  [sources trip.com Ctrip 1.09b hong kong]

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