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Ctrip's prospectus in Hong Kong: leverage new valuation with content, continue multi line investment

via:博客园     time:2021/4/7 21:37:41     readed:83


Ctrip's second listing enters the countdown.

Source: traveldaily

On the evening of April 6, documents from the Hong Kong Stock Exchange showed that Ctrip had passed the listing hearing of the Hong Kong stock exchange.

Ctrip's second listing has long been symptomatic. In January 2020, Reuters reported that Ctrip and Baidu had held preliminary consultations with the Hong Kong Stock Exchange on the possible second listing.

According to Ctrip's preliminary offering documents (information set after hearing) submitted on the website of the stock exchange of Hong Kong, the financial institutions participating in the second listing of Ctrip are CICC, Goldman Sachs and JPMorgan Chase.

Some people in the industry believe that Ctrip's organizational structure adjustment at the beginning of this year may be to meet the second listing. According to the e-mail issued by Sun Jie, CEO of Ctrip, Ctrip has set up a rotation system, with a rotation period of one to two years. Xiong Xing is appointed as the first coo to be responsible for air tickets, hotels, business travel, IBU and technology. In addition, Tan Yudong is the CEO of the air ticket business unit; Fang Jiqin is the chairman of the business travel business unit; Zhang Yong is the CEO of the business travel business unit; Chen Tamin is the vice president of finance.

Ctrip was listed on NASDAQ in December 2003. As of April 6, Ctrip's share price was $39.69 per share, with a market value of $23.857 billion.

Underrated Ctrip

Ctrip's second listing in Hong Kong is under the tide of the return of China capital stock to Hong Kong stock market. Before Ctrip's second listing in Hong Kong stock market, more than ten enterprises, including Alibaba, Netease, Jingdong, Baidu, BiliBili, etc., have been listed in Hong Kong stock market.

This wave of collective return of China concept stocks is mostly caused by the tense Sino US relations and the stricter supervision of China concept stocks in the US capital market. Since its listing in 2003, Ctrip's performance in the US stock market is not satisfactory. As China's leading online travel platform, Ctrip's share price has been hovering at a low level compared with booking group and Expedia.

As of April 6, the total market value of Ctrip was $23.857 billion, while the market value of booking group and Expedia reached $98.684 billion and $25.323 billion respectively.


According to the prospectus of Ctrip, according to Gmv, the market share of Ctrip in China and China ranks first

Under the epidemic situation, Ctrip also encountered a certain operating pressure. In 2020, under the influence of the epidemic, Ctrip's performance will drop sharply, and its annual net operating income will be 18.3 billion yuan, and its net loss will be 3.2 billion yuan. According to IPO daily, Ctrip's second listing can supplement cash flow and ease the pressure on Ctrip's operation.

However, according to Ctrip's prospectus, as of January 31, 2021, Ctrip has cash and equivalents of RMB 22.6 billion, outstanding convertible preferred debt principal of US $1.1 billion, outstanding exchangeable preferred bond principal of US $500 million, and three outstanding syndicated loan financing of US $2.8 billion.

Ctrip said that the cash and cash equivalents currently owned by the group and the expected cash flow from its operations will meet the expected working capital requirements and capital expenditure requirements for at least the next 12 months from the compilation date. But at the same time pointed out that due to the changing business situation or other future development, such as seeking investment or acquisition, Ctrip must obtain additional funds.

Content marketing strategy to create new valuation space


According to lace news agency, Ctrip's moves may bring possibility for its revaluation in the capital market. Ctrip also mentioned in the prospectus that Ctrip's content marketing ecology will provide two-way empowerment for both sides of supply and demand. While activating users' travel inspiration, it will also break the bottleneck of traffic growth and provide new value drivers for transaction transformation and supply chain empowerment.

According to the Yiguan report, the scale of tourism advertising market is expected to grow from 94.6 billion yuan in 2019 to 139.3 billion yuan in 2025. It can be seen that the innovation of marketing system will not only bring new performance growth point for Ctrip, but also create new valuation space for Ctrip after its second listing.

What else does the prospectus reveal

According to Ctrip's prospectus, the second listing of Ctrip does not affect the basic structure of major shareholders. At present, baidu is still the largest shareholder with a shareholding ratio of 11.5%.


In addition, according to the prospectus, Ctrip also disclosed the vie structure.


In terms of investment, the prospectus shows that Ctrip's investment decreased by 7% from 51.3 billion yuan as of December 31, 2019 to 47.9 billion yuan as of December 31, 2020, mainly due to the loss of Ctrip's equity method investment (mainly in makemytrip), which is due to the significant impact of the new coronavirus epidemic.

Ctrip's investment as of December 31, 2019 increased by 91% from 26.9 billion yuan as of December 31, 2018, mainly due to the investment in makemytrip and the strategic use of the cash part previously invested in short-term financial products in long-term products in 2019, so as to achieve the optimized investment return rate.




From the end of 2020 to the last practicable date, Ctrip has invested (or plans to invest) in a number of companies. As of the last practicable date (March 31, 2021), its investment fields include OTA, virtual bank, hotel management, automobile service and hotel.


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