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Travel & Leisure

China Tourism seeks $2.16bn in Hong Kong's biggest listing of 2022

Duty-free shop operator's shares offered at deep discount amid COVID closures

The Sanya International Duty-Free Shopping Complex in Sanya, in China's Hainan Province.   © Reuters

HONG KONG (Reuters) -- China Tourism Group Duty Free Corp. is aiming to raise up to $2.16 billion through a new listing in Hong Kong, according to a term sheet reviewed by Reuters, in what will be the largest share sale in the city in 2022.

Shanghai-listed China Tourism is planning to sell 102.76 million shares priced between HK$143.50 and HK$165.50 ($18.30 and $21.10) each, the term sheet said.

China Tourism, which has built the largest duty-free retail network in China, did not immediately respond to a request for comment.

The launch of the deal comes as the island of Hainan in China's south, where China Tourism has several major shopping outlets, remains under tight restrictions due to an outbreak of COVID-19.

The price range represents a discount of 29.3% to 38.7% from the stock's closing price of 201.19 yuan ($29.82) on Thursday in Shanghai.

Hong Kong share sales of Chinese-listed companies are typically offered at a discount to entice investors to buy the stock, but the flagged discount of China Tourism is higher than normal.

China Tourism's Shanghai-listed shares have recovered most of their losses since lockdowns across Hainan began to be ordered last week. Its shares are down 8.3% in the year to date.

China Tourism plans to set the final price next Thursday, the term sheet said.

Almost 40% of the stock on offer in the deal has been sold to cornerstone shareholders who will invest about $795 million, according to the term sheet.

Sanya, a holiday city on the southern end of Hainan island at the center of the COVID outbreak, reported 1,690 symptomatic and 1,504 asymptomatic cases from Aug. 1 through 10. 

The duty-free shop operator's deal, if executed, would surpass Tianqi Lithium's $1.71 billion listing in June to become the biggest share sale in Hong Kong in 2022.

There has been $4.9 billion worth of initial public offerings and secondary share sales in the city this year, compared to $34.7 billion at the same time last year, according to Dealogic data.

It is the slowest year-to-date for new listings since 2009.

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