CHINA TRAVEL HK Once Surges Over 30%; Citi Says Proposed Spin-off of Non-Attraction Businesses Positive, Initiates 30-Day Catalyst Watch

CHINA TRAVEL HK (00308.HK) +0.250 (+20.661%) Short selling $11.65M; Ratio 4.708% plans to spin off its Hong Kong and Macau operations for a separate listing on the Main Board by way of introduction. The stock opened 14.88% higher this morning (21st) and once surged about 32% to a peak of HKD1.6. It is now trading at HKD1.44, up 19.01%, with turnover of 126 million shares, involving HKD190 million.CHINA TRAVEL HK announced that it intends to spin off its Hong Kong and Macau operations (including hotels, cross-border passenger transport and travel document services) for a separate listing on the Main Board of the Hong Kong Stock Exchange by way of introduction. Through an internal reorganization, CHINA TRAVEL HK will distribute all equity interests in subsidiaries holding the Hong Kong and Macau operations to qualifying shareholders. Upon completion, the Hong Kong and Macau unit will be separately listed by way of introduction, without issuing new shares or raising funds. Both companies will have independent management teams and boards of directors. The spin-off aims to address the long-standing issue of mixed asset attributes within the company.Citi said in a research report that CHINA TRAVEL HK plans to spin off its non-attraction businesses, including passenger transport, hotels, travel documents and related services, through a distribution in specie and seek a separate listing of the new entity on the Main Board of the Hong Kong Stock Exchange. The spin-off will not involve new share issuance and will not dilute existing shareholders interests.Citi noted that although the spun-off businesses account for a relatively large profit base, representing about 50% of the companys net profit from continuing operations in 2025, which may reduce the trading liquidity of both entities post spin-off, it maintains a positive view on the overall transaction. The broker believes the move reflects managements commitment to focusing resources and management capabilities on its core China tourism business and may help eliminate the holding company discount.Management also announced a five-year development plan, targeting a doubling of sales and profit in its attraction business by 2030 compared with 2025, mainly driven by double-digit sales CAGR, intellectual property integration and technological advancement. Citi has placed CHINA TRAVEL HK on a 30-day positive catalyst watch, believing that a series of shareholder value enhancement initiatives over the past 12 months, including the spin-off of non-core businesses, disposal of loss-making tourism property operations, and acquisitions of ski resorts and ski management companies, will gradually unlock value. The broker maintained a Buy rating with a TP of HKD1.49. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-20 16:25.)