Shares of China Tourism Group Duty Free dropped despite its new ambitious plans as the world’s largest tax-free retailer is expected to launch Hong Kong's biggest listing this year.
CDF’s mainland-listed stock price closed 2.4% down at CNY190.18 (USD28). The company's shares are more than 10% down this year.
The travel retailer intends to offer 102.8 million shares during the four-day global offering to gain HKD15.5 billion (USD2 billion) in net proceeds, the Beijing-based firm said in its prospectus. The equity is priced between HKD143.5 and HKD165.5 (from USD18.30 to USD21.10). The shares are expected to start trading on Aug. 25.
If a greenshoe option is fully exercised, proceeds from the secondary listing will increase to HKD17.9 billion, it added. After the share sale, state-owned China Tourism Group will hold a 50.6% stake in CDF, remaining the controlling shareholder.
The company has retained a strong market share during the Covid-19 pandemic. CDF’s revenue ranked first among global travel retailers in the past two years. Its global market share reached 24.6% last year and its domestic equivalent was 86%, the prospectus said, citing data from Frost & Sullivan.
However, CDF has also been affected by the most recent Covid-19 outbreaks in China. In the first half of this year, the company's net profit slumped 27% to CNY3.9 billion (USD574.9 million) from a year ago, according to its earnings report. Its revenue fell 22% to CNY27.7 billion (USD4.1 billion).
Read original article