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China International Travel Service Corp. IPO

China International Travel IPO to raise $381 Million

Sep 23, 2009

SHANGHAI - China International Travel Service Corp. could raise as much as 2.6 billion yuan ($380.7 million) in its initial public offering, after it set an indicative price range of 10.80 yuan to 11.78 yuan a share for the deal Tuesday.

China International Travel, the country's biggest tour agency by sales, said the indicative price range equates to a price/earnings ratio of 45-49.08 based on its 2008 earnings per share and an enlarged share base.

The price-earnings ratio, much higher than an average ratio of 26 in China's stock market, shows investors' enthusiasm for the country's booming travel industry, which is benefiting from a rising affluent population and consumer spending.

Despite the global financial crisis and spread of the H1N1 flu among humans, China's tourism revenue grew 11% to 498 billion yuan in the six months ended June 30, the state-run Xinhua news agency reported Monday.

China International Travel said last week it planned to sell as many as 220 million yuan-denominated A shares, or 25% of its enlarged share capital, ahead of its listing on the Shanghai Stock Exchange. It didn't say when its shares will start trading.

The Beijing-based company said it will use the proceeds from the IPO to open 36 branches in Chinese cities, fund its six overseas subsidiaries and improve its online travel services.

China International Travel IPO to raise $381 Million
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Source: Dow Jones Newswires

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