(Yicai Global) June 22 -- A leading Chinese online travel agency that was formed in a merger last December and is backed by Tencent Holdings and ticketing giant Ctrip, aims to raise up to USD1.5 billion in a Hong Kong initial public offering.
Tongcheng-Elong Holdings has submitted a prospectus to the Hong Kong bourse, Yicai Global learned, as part of the Suzhou-based firm's efforts to raise between USD1 billion and USD1.5 billion. Morgan Stanley, JP Morgan and CMB International will act as joint sponsors for the float.
Tongcheng Network and E-dragon Holdings came together in a major merger driven by key shareholders Tencent and Ctrip, which own 24.9 percent and 22.9 percent, respectively. The combined firm boasts a user base of 500 million customers and more than CNY100 billion (USD16 billion) in sales last year.
The platform, which mainly provides domestic transport ticketing and accommodation booking services, focuses on urban areas outside of major hubs such as Beijing and Shanghai. Chinese residents in non-first-tier cities made up some 85 percent of its total users last year.
Consumers in second-tier cities and below are a key driving force behind China's recent boom in domestic travel. Residents in non-first-tier cities accounted for just under 90 percent of total tourism spending in the country in 2017.
Editor: William Clegg