Trip.com kicks off US$1.4 billion secondary listing

08/4 2021 14:45

Baidu-backed travel booking site Trip.com kicks off Hong Kong share sale, at HK$333 per share
Its maximum offer price represents a 11 per cent premium over its Nasdaq closing price Wednesday, as firm bets on strong recovery next year

Trip.com has set its secondary listing at the top end of a range, offering its shares at HK$333 (US$42.95) each as it aims to raise US$1.4 billion in Hong Kong amid tentative signs of a slow recovery in leisure travelling.

The top end of its price range in Hong Kong translates to an 11 per cent premium to Trip.com’s closing price of US$38.81 at its primary listing venue on the Nasdaq market. The Shanghai-based company is selling 31.6 million shares in its Hong Kong initial public offering (IPO), starting the sale today until April 13, according to its prospectus. The company did not disclose the lower end of its price range. 

Trip.com joins the steady exodus of US-listed Chinese tech company seeking secondary listings in Hong Kong since 2020, as a flood of capital by optimistic investors boosted valuations, amid an increasingly hostile US capital market driven by the brinkmanship policies in the waning days of the Trump administration.

Total IPO proceeds raised in Hong Kong reached a historical high during the first quarter, totalling HK$117 billion across 13 deals, ranking the city’s bourse the world’s second-largest IPO globally after Nasdaq in terms of fund raised. 
Still, some of the sizzle appear to have gone out of Hong Kong’s IPO debuts in recent weeks, with stocks such as the gaming and video stream platform Bilibili, and the Chinese internet search engine Baidu all trading below their offer prices when transactions began. The recent lacklustre first-day performance among Hong Kong new issuers and those elsewhere, such as food delivery start-up Deliveroo, which dropped 26 per cent as the worst IPO of the London Stock Exchange, has raised doubts about valuations of tech stocks in general and whether investors’ fervour for IPOs has waned.

JPMorgan, CICC and Goldman Sachs are the joint sponsors, global coordinators and lead managers of the deal. Each American depositary share is equivalent to one ordinary share. Trip.com will start trading on the main board on April 19, under the stock code “9961” on the main board. There is an overallotment option granted to the underwriters to sell up to 4.7 million shares to meet strong investor demand.