Core Viewpoint - Hong Kong Travel (03808) has experienced a decline in performance in the first half of the year, primarily due to negative impacts from its tourism site business. However, after divesting its loss-making tourism real estate business, the company expects improvements in its financial statements. The hotel business continues to grow, and with fixed costs being significant, revenue increases will lead to a decrease in expense ratios, resulting in profit growth outpacing revenue growth. The passenger transport business remains stable, and the travel document business is expected to return to normal levels. Overall performance is anticipated to improve in the second half of the year, supported by a recovery in consumption and tourism, along with the upcoming winter sports season [1][2]. Business Restructuring - The company announced a group restructuring to divest its tourism real estate business into a private company, which includes five projects: Zhuhai Huaqing Bay, Xianyang Huaqing Bay, Anji Resort, Shenzhen Airport Project, and Chengdu Jintang Project. The projected revenues for the divested parts for 2023, 2024, and the first half of 2025 are 629 million, 459 million, and 147 million HKD respectively, with net losses of 461 million, 239 million, and 192 million HKD. The divestiture is expected to reduce profit drag and improve overall profitability [3]. Shareholder Distribution - The company offers shareholders two distribution options: 1) Physical distribution, where each share corresponds to one share in the private company; 2) Cash distribution, where each share pays 0.336 HKD, approximately 21.96% of the last closing price of 1.53 HKD before the announcement. Shareholders under the Shanghai-Hong Kong Stock Connect will receive cash due to difficulties in receiving shares of the private company [4]. Capital Reduction Proposal - The board has proposed a capital reduction, decreasing the capital from 9.222 billion HKD to 722 million HKD. The 8.5 billion HKD generated from this reduction will be transferred to retained earnings, which will serve as distributable reserves. This reduction will significantly limit the company's ability to pay dividends or undertake any actions requiring the use of distributable reserves, but it will allow for more flexibility in corporate actions and dividend policy decisions [5]. Expansion into Snow Economy - The company is actively expanding into the snow economy by acquiring a 75% stake in Jilin Songhua Lake International Resort Development Co., Ltd. and a 75% stake in Beijing Wanbingxue Sports Co., Ltd. The Songhua Lake company operates a ski resort and related facilities, while Wanbingxue focuses on snowfield development and management. These projects are expected to be consolidated in November, potentially contributing to revenue and profit growth [6][7].
国证国际：香港中旅未来业绩表现有望持续改善 推荐关注后续业务发展