Trip.com becomes first dual listed tourism company

Trip.com, China's biggest tourism company, surged 4.6 percent on Monday on its first trading day in Hong Kong, marking its dual listing in Hong Kong and the United States.

The Nasdaq-listed company, formerly known as Ctrip, is the latest Chinese technology firm with a "second listing" in Hong Kong, following companies such as Baidu and Bilibili.

With the code 9961, Trip closed at 280.2 Hong Kong dollars (US$43.1) compared with an initial public offering (IPO) price of HK$268. Its market value reached HK$177 billion.

The company expects rebounding tourism demand and sales in the wake of increasing numbers of COVID-19 vaccinations. It will continue to expand in global markets when international travel begins to resume, Trip chairman James Liang said during a ceremony held at its headquarters in Shanghai. 

“Travel demand hasn't disappeared despite the pandemic. We see booming sales for domestic trips and accommodations,” Liang said, who predicted “golden opportunities” in the next five years.

There is huge potential in per-capita tourism consumption. In 2019, domestic per-capita tourism consumption was US$158 per trip, far lower than the US$873 figure for American tourists, researchers said. 

Trip now has about 2 percent market shares in the global tourism market. At the end of 2020, the company offered products from 1.2 million accommodation companies, 480 airlines and 30,000 other tourism-service partners around the world.

The IPO fundraising will be used to invest in technology and improve services, including artificial intelligence, cloud and virtual reality. Between 2018 and 2020, Trip invested 28 billion yuan (US$4.3 billion) in these sectors.

Trip is the first tourism firm listed in both the United States and Hong Kong.

The dual-listing structure will help the company expand in Asian regions with the Hong Kong listing. It also brings Trip “revaluation” opportunities as Asian investors become more familiar with the company.

Trip is "clearly undervalued" in the Nasdaq market compared to other tourism firms such as Expedia and Booking, said Liang.

Many US-listed Chinese high-tech firms are seeking “second listings” in domestic and Hong Kong markets, providing opportunities for share revaluations and enabling them to avoid uncertain risks during US-China disputes.

Ti Gong