's New Start – A Second IPO On HKEX

  •'s income was shaken dramatically by COVID-19, especially in the first two quarters of 2020.
  • The firm kept making transformations in 2020, such as technological innovation, livestreaming, and short trips.
  • On account of China's recovering economy,'s recovery curve was steeper than those of and Expedia. went public on HKEX on April 19, 2021. The company will collect HKD 8.33 billion with HKD 268 per offer share from the IPO. J.P. Morgan, China International Capital Corporation and Goldman Sachs underwrote the deal.

Photo by Annie Spratt on Unsplash

Set up in 1999, gradually grew from a startup to a global one-stop travel platform with unique leisure products and services. In 2019, the firm was selected as among the top five online travel agencies (OTAs) in the world, just behind and Expedia.

Coming with as much surprise as force, the outbreak of COVID-19 interrupted global tourism's high-speed growth. According to the World Tourism Organization, the global tourism industry lost USD 1.3 trillion in 2020. Regarding, its net revenue dropped 48.67%, nearly a half, from 2019's CNY 35,67 billion to 2020's CNY 18.3 billion. Also, its net income turned to a negative value for the first time during these four years, indicating the firm's failure to make money last year. In 2020, accommodation, reservation and package tours were still the two revenue pillars of the company, and their respective proportions of total income were similar.

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revenue.png.png (TCOM) took three initiatives to fight against COVID-19's negative impacts. First, technological innovation. From the firm's prospectus, the proceeds will be primarily used in technology investments to enhance user experience. From 2018 to 2020,'s total R&D expenses for these years were around CNY 28 billion. Even in the depths of the pandemic, it did not cut R&D costs.

Then, livestreaming. As online entertainment has become a significant part of life since 2020, the firm emphasized the online marketing strategy and adopted the new form to reach users. For instance,'s new program named BOSS Livestreaming contributing nearly CNY 5 billion in trading volumes globally from March 2020 to the end of the year. Bloggers and travel brands could disseminate their products via this channel, attracting more clients.

Last but not least, excursions. When global trips reduced dramatically in 2020, discovering some scenery spots domestically turned to be more valuable. City excursion cases like Huzhou and Yancheng are telling examples. Not only did this action drive some small cities' business development, but it also helped increase the number of's ecosystem partners.

Thanks to's efforts during COVID-19, its recovery rate in 2020 was higher than and Expedia, the top two OTAs in the world. Precisely, the company had recovered to 2019's 48.9% by the end of the third quarter of 2020, higher than's 47.4% and Expedia's 45.9%. Furthermore,'s revenue decline was lower than the other top players in 2020.

With China's continuous recovery from COVID-19, more and more investors find opportunities from investing in tourism. Surprisingly, the year 2020 recognized the highest fundraising amount – CNY 420 billion. As the capital market forecasted, monthly active user figures in China's OTAs reached 0.13 billion, approaching last year's amounts.'s IPO might be seen as evidence of capital firms' persistently optimistic views on tourism. 

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As James Liang announced at's ceremony in their Shanghai headquarters on April 19, 2021, the firm will enact three new changes after this IPO. To begin with, they will strengthen traveling products within village areas. As coronavirus is not controlled well in overseas nations, domestic tourism is still the main battlefield. Additionally, people are predicted to start discovering resorts in China's remote towns, so rural travel is expected to have a large development phase. Secondly, keeping pace with globalization. Although COVID-19 is still a threat to the public, still has branches globally. It is better for the firm to build its global brands, cooperating with overseas clients. Thirdly, a more active marketing strategy – the content platform. To be specific,'s new travel marketing hub, Star Store, which allows partners to release their content to increase bookings.

The recovery rate of the travel industry has surpassed people's expectations. This may be explained by OTAs' previous accumulation – massive online users and worldwide networks. With the pandemic being contained and public health making progress, the global tourism market size is expected to reach USD 7.1 billion in 2025, returning back to 2019's level in 2022. Under this forecast,'s IPO will match with the market's wishes – rising along with the key OTAs and generating more profits.

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Disclaimer: Please consult your own advisor before making any investment decision. 

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