China duty-free firm China Tourism eyes $2.74 billion Hong Kong listing

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China duty-free firm China Tourism eyes $2.74 billion Hong Kong listing

HONG China Tourism Group Duty Free Corp is aiming to launch its Hong Kong listing worth up to $2.74 billion on Friday in what would be the city's largest share sale in 2022, according to two sources with direct knowledge of the matter.

The information was not public yet, and the company, built the largest duty-free retail network in China, plans to sell 5 per cent of its shares in the float.

A deal would be worth $2.74 billion, based on the company's Shanghai market value of 370.2 billion yuan $54.8 billion on Monday, but a discount is always applied to Hong Kong secondary share sales.

The sources said that the discount will determine the final size of the deal.

The duty-free shop operator's deal, if executed, would surpass Tianqi Lithium's $1.71 billion listing in June to become the biggest share sale in Hong Kong in 2022.

China Tourism's shares fell 4.7 per cent on Monday after more areas of the southernmost province of Hainan, an island dependent on tourism, were forced into a lock-down to curb a COVID outbreak.

The island's key tourist city of Sanya closed duty free malls last week after a rise in the number of cases.

More than 1,400 domestically transmitted infections have been reported in Hainan this month, including 982 symptomatic ones, prompting authorities to order lockdowns of more areas on the island.

Duty-free spending in China is largely concentrated in Hainan, where the annual limit on individual duty-free spending was increased to 100,000 yuan $14,800 in 2020 from 30,000 yuan previously. The island has been a source of a consumption boom, due to the Pandemic closing of China's borders.