On Nov. 26, Tongcheng-eLong, the online travel platform backed by Tencent became listed on the Hong Kong Stock Exchange (HKEX) at an issuing price of 9.8 Hong Kong dollars.
What makes Tongcheng-eLong’s IPO different from other previous IPOs at HKEX is that it does not have cornerstone investors. The prospectus indicated that the underwriters are Morgan Stanley, JPMorgan Chase & Co., and CMBI.
“Our IPO has attracted the attention of many global institutional investors, and we are fully confident to complete this IPO in Hong Kong,” says Wu Jiazhu, CEO of Tongcheng-eLong.
By the end of last year, the two online travel platforms Tongcheng network, a subsidiary under Tongcheng and Elong merged to become another new company called Tongcheng-eLong. The company submitted its prospectus to HKEX on June 21 this year. According to the prospectus, before the merge, the two companies have both maintained a rapid growth in the past three consecutive years, and ran a profit in 2017.
Tongcheng’s revenue has increased from 580 million yuan in 2015 to around 2.71 billion yuan in 2017. The total revenue of eLong has risen from nearly 1.03 billion yuan in 2015 to around 2.52 billion in 2017. According to latest exposures, up until June 30, Tongcheng-eLong has achieved a total revenue of 845 million yuan.
Online tourism has been a hot market in China. According to Sina Finance, in 2017, the total number of tourist trips in China has reached 5 billion, with the total consumption reaching 4.6 trillion yuan. Among them, 1.2 trillion yuan is generated by online travel, with a market penetration rate of 25.4%. It is estimated that in 2022, the total number of tourist trips in China and total consumption is expected to reach 7.5 billion and 8 trillion yuan respectively.
Featured photo credit to Visual China Group