Qian Jiannong (center), chief executive officer of Fosun Tourism Group, poses for photographs with other executives during the company's IPO conference in Hong Kong on Nov 29, 2018. [Photo by Tan Qingju/For China Daily]
Fosun Tourism Group will establish a presence in the top 10 tourist destinations in China, with a focus on cities adjacent to Beijing, Shanghai and the Guangdong-Hong Kong-Macao Greater Bay Area, the company's CEO Qian Jiannong said in an interview on Monday.
The leisure-focused tourism arm of Shanghai-based conglomerate Fosun International made its debut on the Hong Kong stock exchange on Friday.
The tourism group said it will use the majority of the financing to explore destinations and develop new projects in well-known tourism attractions, including Lijiang in Yunnan province and Taicang in Jiangsu province, Qian said.
With an offering price of HK$15.60 ($2), the company's share price shed 3.97 percent on its first trading day to close at HK$14.98.
But Qian said it can still be considered a successful listing given that the benchmark Hang Seng Index dropped 1.62 percent that day.
The bearish Hong Kong stock market has impaired the performance of many newly listed companies. The Hang Seng Index has dropped more than 14 percent since the beginning of the year.
Data from market information provider Wind Info showed that 130 of the 186 newly listed companies in Hong Kong saw their share prices drop below their offering prices at the beginning of December.
Companies related to the internet industry have seen the biggest slump.
But, Guo Guangchang, Fosun International's founder and chairman, wrote in a public note in late November that only good companies will choose to go public when the market is lackluster.
Fosun Tourism Group has three major businesses: resorts, managing the group's tourism destinations and tourism solutions.
Its prospectus showed that the company's income hit 8.9 billion yuan ($1.3 billion), 10.7 billion yuan and 11.8 billion yuan in 2015, 2016 and 2017, respectively. In the first half of this year, its income totaled 6.7 billion yuan.
Club Med, the global resort brand Fosun acquired in 2015, is the company's major income earner, contributing over 99 percent of total revenue between 2015-17.
Although the company reported net losses from 2015 and 2017, it reported a profit of more than 53 million yuan in the quarter ended Sept 30.
The company's large amount of nonrecurring expenses－such as developing the Sanya Atlantis resort that opened in late April－are driving the losses, Qian explained. However, the resort contributed more than 300 million yuan in income between May and August.
More than 95 percent of the 1,004 vacation villas have been sold at the Sanya resort, which generated 7 billion yuan of income, he said.
According to global market consultancy Frost and Sullivan, each Chinese traveler spent $575 on average on their vacations in 2017. That budget will increase to $951 in 2022.
Propelled by China's steady economic growth, increasing per capita expenditure on cultural and recreational products, and higher traveling frequency, the potential of the Chinese tourism market is huge, according to the consulting firm.
(c) 2018 China Daily Information Company. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers