CHINA. In an historic moment, CTG Duty-Free, parent company of China Duty Free Group, has begun trading on The Stock Exchange of Hong Kong (HKEX).
As reported, the issue price was HK$158 per share, and the total amount of funds raised was about HK$16.236 billion (US2.1 billion), in the process becoming Hong Kong’s largest IPO this year.
CTG Duty-Free has now officially become an ‘A+H’ (Mainland China and Hong Kong) dual-listed company. This morning (26 August) a listing ceremony was held at the HKEX. This was delayed a day due to a Typhoon 8 in Hong Kong the previous day.
VIPs who graced the ceremony included the Deputy Director of the Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region (LOCPG) Yin Zonghua; the Financial Secretary of the Hong Kong SAR Government, Paul Chan; the CEO of the HKEX, Nicolas Aguzin; and other senior figures.
The ceremony, which marked CTG Duty-Free’s debut in the international capital market, was led by the group’s Chairman of the Board Peng Hui together with representatives from four sectors – consumers, investors, suppliers and staff. China Tourism Group President Wang Haimin was also present to witness what the group described as “an historic moment”,
Commenting on this representation, CTG Duty-Free said, “It is noteworthy that the company invited a consumer representative, a staff representative, a well-known brand supplier representative and a shareholder representative. This reflects the market-oriented and international characteristics of CTG Duty-Free and simultaneously shows the company’s customer-focused, trusted, ethical business operating and excellent service business philosophy.”
The group added: “The company aims to build a solid supply chain and create a better future for consumers, employees, partners, and shareholders.”
CTG Duty-Free said that due to the impact of the pandemic, international duty free retailers have been under pressure to varying degrees during the past two years.
“However,” it added. “CTG Duty-Free’s performance has risen against the trend and has ranked first in the world for duty free for two consecutive years from 2020 to 2021 [Source: The Moodie Davitt Report Top Travel Retailers -Ed].
“As of the end of 2021, CTG Duty-Free’s market share in the global travel retail industry has reached 24.6%, and its share in China’s duty free market is as high as 86.0%.”
CTG Duty-Free said that its listing on the HKEX has become the “most outstanding stock” among those newly listed.
“Combining with the company’s fundamentals and development potential, the long-term investment value is significant, and the share of CTG Duty-Free is undoubtedly a high-quality and scarce resource for investors in the Hong Kong stock market,” it added.
The company commented: “Industry insiders consider that the action of CTG Duty-Free’s listing on the HKEX could assist the company in employing the international capital platform to further accelerate the expansion of both domestic and international channels.
“It will also improve the efficiency of the supply chain and promote the extension of the industrial chain, thereby consolidating its leading position in the global travel retail market.”
Describing itself as the “fundraising king” of Hong Kong stocks this year, CTG Duty-Free emphasised the value of its nine cornerstone investors (listed below).
“This is a strong line-up including many sovereign funds, large domestic and foreign long-term funds, large central enterprises and upstream and downstream leaders in the industry chain,” it said.
Cornerstone investors
- China State-Owned Enterprise Mixed Ownership Reform Fund Co., Ltd
- AmorePacific Group
- COSCO Shipping (Hong Kong) Co., Limited
- Rongshi International Holding Company Limited
- Shanghai Airport Investment Corporation Limited
- Luzhou Laojiao Co., Ltd.
- China Structural Reform Fund Corporation Limited
- Hainan Free Trade Port Construction Investment Fund Co., Ltd
- The Oaktree Funds
CTG Duty-Free said that its international book building was fully covered within an hour, while the HK public offering was over-subscribed 1.06 times. This, it said, illustrated Hong Kong stock investors’ recognition and confidence in the company’s long-term development.
A duty free pioneer lands on the HKEX
Outlining the use of the funds raised (see our earlier report for full details), the group concluded: “It is foreseeable that after the HKEX Listing, the company will have more resources at home and abroad to provide services for tourists worldwide.
“Looking forward, it is believed that under the great potential of the global travel retail market and with the assistance from both domestic and foreign capital, CTG Duty-Free, which has the most comprehensive duty-free retail channels and the largest market share in China, will strengthen its business scope and reinforce its leading position in the global travel retail market.”
In June The Moodie Davitt Report launched a new quarterly eZine called The Moodie Davitt China Travel Retail Report. The cover story was dedicated to China Tourism Group. Click on the image to read the bi-lingual title. The next edition will be published in October and will feature a comprehensive follow-up on CTG Duty-Free’s Global Offering and Hong Kong secondary listing. Please email Kristyn@MoodieDavittReport.com for a free first year subscription.
