BAIJIU DISTILLER LUZHOU LAOJIAO BACKS CHINA DUTY FREE'S IPO IN HONG KONG
By Tony Zhu
Source: China Duty Free Group
The world’s largest travel retailer China Tourism Group Duty Free (CTGDF) is to raise up to HKD17 billion (USD2.17b) from a second listing in Hong Kong stock exchange.
The Beijing-based company, which is the parent company of China Duty Free Group, is offering 102.76 million shares at between HKD143.5 and HKD165.5 each.
It is reported that the company has already sold 39.3 percent of its offer to 9 cornerstone investors for a combined HKD6.238b.
Among the 9 cornerstone investors is Chinese baijiu distiller Luzhou Laojiao, which is reportedly investing HKD626m, about 3.68 percent of the amount to be raised.
The other cornerstone investors include China State-Owned Enterprise Mixed Ownership Reform Fund, South Korean cosmetics producer AmorePacific Group, Shanghai Airport, Cosco Shipping, China Structural Reform Fund, Hainan Free Trade Port Construction Investment Fund, Oaktree Capital Management and and Rongshi International, according to a report by the South China Morning Post.
The Hong Kong shares will be priced on 18 August and is expected to commence trading on 25 August.
CTGDF is already listed in the Shanghai stock exchange, the Hong Kong offer price represents a 29.2 percent discount on yesterday’s closing price of the company’s shares in Shanghai.
This offer price is also 7 percent lower than that of CGTDF’s last Hong Kong listing attempt in December 2021 which was shelved due to sluggish market conditions.
CTGDF’s Shanghai share price more than tripled in 2020 after China increased the quota on duty-free buying for domestic travellers to Hainan island to encourage consumption after the initial outbreak of Covid-19 in Wuhan.
However, with China’s zero COVID policy and lockdown measures in some major cities since last year, the company’s share price dropped 22 percent last year and 14 percent so far this year.
The company has 86 percent market share in China’s duty free market, half of which is in Hainan island which is currently under lockdown.
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