The latest: Hotelier H World Group Ltd. (HTHT.US; 1179.HK) on Tuesday announced it will raise $260 million by selling 6.19 million American depositary shares (ADSs), or about 1.95% of its enlarged share capital, at a price of $42 each.

Looking up: H World will use the funds to enhance the competitiveness of its hotel portfolio and develop its regional-based operating model in the post-Covid era, as well as for investing in technology infrastructure and its supply chain ecosystem.

Take Note: The sale price represents a 4% discount to H World’s closing price the day before the announcement, indicating tepid demand for the shares. H World added the deal is also subject to market and other closing conditions.

Digging Deeper: H World is a China-based hotel group with nearly 800,000 rooms in 8,402 hotels both inside and outside China at the end of September. The company’s low-cost Hanting chain is the backbone of its business, and it operates higher-end brands like Mercure, Ibis and Ibis Styles in China through a strategic partnership with France’s Accor (AC.PA). The company’s revenue grew 16% year-on-year in last year’s third quarter and is expected to grow 7% to 11% in the fourth quarter, benefiting from the start of a tourism recovery in the non-China international markets where H World does business.

Market Reaction: H World’s New York-listed shares rose 0.89% on Tuesday after the announcement. But its Hong Kong-listed shares dropped on Wednesday to close down 0.7% at HK$35.10 by the midday break. They now trade at the upper end of their 52-week range.

Translation by Jony Ho

To subscribe to Bamboo Works free weekly newsletter, click here

Recent Articles

Financiering is Linklogis' speciality

Linklogis stuck in China’s real estate slump

Transactions on the company’s supply chain financing platforms grew just 7% in the first quarter as it failed to reduce its reliance on property-related customers Key Takeaways: Transactions on Linklogis’…
Illustration of Tims coffee and bagel

A Bagel success story, and a Red Bull slayer

Tim Hortons is tasting some new success in China with a bagel formula. Will this mark the start of a turnaround for the struggling chain? And a Red Bull killer named Eastroc has filed to list in Hong Kong. What’s the secret to its success, and will it attract investors to its story?