Zhejiang New Century Hotel Management, one of mainland China’s largest private hotel groups, is raising up to HK$1.4 billion (about $180 million) in an initial public offering in Hong Kong, with online travel agency Ctrip taking $32-million worth of shares, according to its amended filing.
The hotel group, which is expected to offer a total of 70 million H shares at HK$13.37 to HK$20.05 apiece, also revealed that New York-listed Green Tree Hospitality Group Ltd is also subscribing to $30 million in shares.
It took 14 years for New Century to finally list in Hong Kong. The group began its IPO journey in 2005 but had it postponed several times due to internal and external economic factors.
New Century is principally engaged in the operation and management of mid-scale to upscale hotel chains in China. As of March 2018, the company was the third largest hotel group and the largest domestic hotel group in terms of number of upscale hotel rooms in operation and under pipeline in China, according to a report by Hortwath.
Established in 1988, the group claims that its hotel network comprised 130 hotels with over 30,000 rooms in China, covering 53 cities throughout 24 provinces, municipalities, and autonomous regions, as well as a pipeline of 120 hotels – including 110 full service management agreements, eight hotel lease agreements, and two franchise agreements – with over 20,000 rooms that are expected to commence operation within the next five years.
Financially, in the eight months ending August 31, 2018, Zhejiang New Century posted revenues of Rmb1.12 billion and gross profit of Rmb250 million.
According to a Hortwath study, the total number of upscale and mid-scale hotel rooms is on the rise and it is estimated that by 2021, the supply of mid-scale and upscale market in China will increase by more than 5,000 hotels with over 700,000 hotel rooms.
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