China Travel looks to acquire key Suzhou site
China Travel International Investment Hong Kong says it is in talks with the local government concerned to acquire a key tourist spot near Suzhou.
The net profit of the tourism conglomerate, which has interests ranging from travel agencies and tourist attractions to hotels and resorts in Hong Kong and the mainland, rose 348 per cent year on year to HK$695 million in 2011.
The net profit of its core business jumped 224 per cent to HK$577 million.
Despite the stellar growth, the company maintains a modest outlook for this year in anticipation of a possible slowdown in the mainland economy.
'We seek a modest growth for 2012, given the high base last year,' said Jeremy Xu, executive director and general manager of China Travel.
The company did not acquire any new tourist hot spots last year after taking over Shaolin Xi, the temple where Chinese martial arts are said to have originated, as China Travel is still in the process of identifying other profitable targets.
'We will continue to acquire tourist destinations rich in historical value, such as the Shaolin Xi,' said Xu.
He said the company is in negotiations to take over Zhouzhuang, the water town between Suzhou and Shanghai that features several Ming-era stone bridges.
The company is also in talks with Zhejiang, Jiangsu and Ningxia governments over several other local attractions.
China Travel has adopted a more careful approach to expansion after its investment in a resort complex in Zhuhai, Guangdong. For years, the 2 billion yuan (HK$2.45 billion) investment hit the company as it kept posting losses, until last year when it returned to the black by reporting a profit of 5 million yuan.
'We realised that we have invested too much in one go,' Xu said. 'We should do it gradually and supplement [the new investments] with property projects for better returns.'