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IPO

IPO

Club Med owner Fosun Tourism receives approval to list shares in Hong Kong

  • Fosun Tourism, the largest leisure tourism resort group in the world by revenue, will be spun off from parent Fosun International as a separately-listed company
PUBLISHED : Monday, 12 November, 2018, 9:42pm
UPDATED : Monday, 12 November, 2018, 10:41pm

Fosun Tourism Group, owner of the French holiday resort chain Club Med, has received listing approval from the Hong Kong stock exchange in an initial public offering expected to raise up to US$1 billion, according to a source familiar with the deal.

Fosun Tourism, the largest leisure tourism resort group in the world by revenue, will be spun off from parent Fosun International, one of China’s most acquisitive privately-controlled conglomerates, into a separately-listed firm.

The approval means Fosun Tourism could join online parenting firm Babytree Group and online travel agent Tongcheng-eLong Holdings to launch initial public offerings in Hong Kong in November.

Paris-headquartered Club Med operates in more than 40 nations with 42 resorts in Europe and the Middle East, 15 in Asia-Pacific and 12 in the Americas, according to its preliminary listing prospectus published in September.

One of its newest resorts, Atlantis Sanya in Hainan Island, which opened in April, combines hotels with an aquarium, a water park, shops and restaurants.

Fosun Tourism recorded revenue of 6.67 billion yuan (US$957.81 million) in the first half, 7.8 per cent higher than the same period a year earlier. Of the total, 95.5 per cent of revenue came from resort operations, while the remainder was from tourism attractions and related services.

First-half operating profit fell to 14.56 million yuan from 133 million yuan in same period last year because of a 95 per cent jump in general and administrative expenses to 655.74 million yuan.

After excluding pre-opening costs of Atlantis Sanya and some non-recurring expenses, the company had a first half net profit of 133.9 million yuan, compared to a loss of 94.2 million yuan.

JP Morgan, CLSA and Citi are joint sponsors of the listing.

Fosun Tourism plans to use around a fifth of the listing proceeds to further develop its resort business, cultural events, and its performing arts and live entertainment business. It will also build up its digital technology infrastructure.

Around 30 per cent of funds raised will be spent on developing resorts in Lijiang, Yunnan province and Taicang, Jiangsu province. Another 25 per cent has been earmarked for acquisitions and strategic alliances that could expand its “global ecosystem”, the company said in the listing document.

Fosun International chairman Guo Guangchang told reporters in August that despite the US-China trade war he will continue to hunt for acquisition opportunities in the United States, Europe and Africa. He added that he “trusted the wisdom of the Chinese and US leadership” to resolve their conflicts.

Another Fosun International unit, 25 per cent-owned Babytree Group, an online parenting platform operator backed by e-commerce giant Alibaba Group Holding, will kick-off its Hong Kong public offering on Wednesday, a source familiar with the deal said.

Babytree’s revenue grew 43 per cent last year to 729.6 million yuan, while its net loss narrowed to 911.1 million yuan from 934.5 million yuan.

Suzhou-based online travel agency Tongcheng-eLong Holdings will also launch its Hong Kong public offering on Wednesday.

The company, which helps budget travellers book accommodation, flights and train tickets, posted a 14.2 per cent rise in revenue last year to 2.52 billion yuan. The company reported a profit for the period of 194.4 million yuan.

In June the company said it was seeking to raise between US$1 billion and US$1.5 billion from the share listing.

Alibaba is the owner of the South China Morning Post.

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