Chinese online travel company Ctrip is considering delisting from Nasdaq and is in talks with potential investors to fund the plan, Reuters reported on Tuesday citing unnamed sources.
Why it matters: China’s largest online travel firm is the fourth Chinese tech company in the past month to consider delisting from the US financial markets. Intensifying tensions between the world’s two largest economies are scaring Chinese tech companies from New York exchanges, once a sought-after market to raise funds.
- The move follows increasing scrutiny of Chinese companies in the US and calls from lawmakers for stricter audit requirements following Chinese beverage chain Luckin’s admission of financial fraud in April.
Details: The management of Baidu-backed Ctrip has asked several financial and strategic investors including venture capital firms and tech companies to fund its privatization plans, according to the Reuters report, citing four people familiar with the matter.
- The company has held preliminary talks with banks about a potential secondary listing in Hong Kong, Reuters reported in January. The company later decided to delist as the coronavirus outbreak has badly hit its travel business and weighed heavily on its market cap, said the Tuesday report.
- A Ctrip representative declined to comment when reached by TechNode on Tuesday.
Context: Ctrip, founded in 1999, went public on Nasdaq in 2003. The company acquired British flight search engine Skyscanner in 2016 and US online travel agency Trip.com in 2017.
- The company’s net revenue dropped 42% year on year to RMB 4.7 billion (around $670 million) in the first quarter. It also booked a net loss of RMB 5.4 billion in the same time period.
- In May, the company forecasted its net revenue would decrease around 67% to 77% year on year in the second quarter, citing “the continued negative impact due to Covid-19.”
- On Monday, Chinese search engine Sogou said it received a buyout offer from Tencent that could lead to the company’s delisting from the New York Stock Exchange (NYSE).
- On July 6, Chinese online news and social media company Sina said it had received an acquisition proposal which would take the company private after 20 years of trading on the Nasdaq.
- Chinese online classifieds marketplace 58.com entered a deal to delist from the NYSE in June.