Ctrip Considers Delisting from Nasdaq

(Source: Ctrip)

China’s largest online travel firm Ctrip.com is considering a delisting from Nasdaq due to the impact of COVID-19 and rising US-China tensions, Reuters reported on Tuesday.

Reuters said Ctrip is in conversations with potential investors such as private equity firms and domestic tech companies about funding its take-private plan.

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The move comes as tensions intensify between the world’s two largest economies. US-listed Chinese companies face increasing scrutiny and strict audit requirements from US regulators. At least six Chinese companies have decided to retreat from US listing, including tech company Sina corp and classified advertisements website 58.com, according to Refinitiv data.

China’s second biggest search giant Sogou Inc. said on Monday that shareholder Tencent Holdings Limited offered a preliminary non-binding proposal to acquire the rest of the company’s outstanding ordinary shares at $9 a piece in cash. Once the transaction is completed, Sogou will also delist from the New York Stock Exchange.

Back in January, Ctrip planned to return to Hong Kong for a secondary listing and approached a number of Chinese and foreign investment banks, Tencent News reported.

The coronavirus outbreak has hit Ctrip’s business hard. The Baidu-backed company reported net revenue of 4.7 billion yuan ($669 million) in the first quarter of 2020, down 42% year-on-year, and a net loss of 5.4 billion yuan. The company said in May its net revenue would decrease by 67% to 77% year-on-year in the second quarter due to COVID-19’s “continued negative impact.” Its shares have fallen 17% so far this year.

Founded in 1999, Ctrip debuted on Nasdaq in 2003, one of the early wave of Chinese tech companies that went public in the US. With a current market value of $16.5 billion, Ctrip has invested or acquired a number of Chinese travel firms in the past decade such as Tuniu, eLong and Qunar. It also acquired British flight search engine Skyscanner in 2016 and US online travel platform Trip.com in 2017.

Reuters reported that Ctrip’s delisting is still under discussion and is subject to change. Because of its diversified ownership structure, it might be a challenge to get shareholder support for the delisting plan. As of 2019, Ctrip’s biggest shareholder Baidu only held a 11.7% stake, followed by Scottish fund manager Baillie Gifford’s 7.7%, according to its 2019 annual report.

Ctrip declined to comment.