Photo/VCG

Oct. 23 (NBD) -- Chinese online travel agency (OTA) Tongcheng-Elong Holdings Limited is to have listing hearing Thursday, expected to complete initial public offering (IPO) in Hong Kong in December, a media outlet reported.

The company plans to raise a total of 1 billion U.S. dollars through IPO. 

Tongcheng-Elong filed its prospectus on June 21 this year. Morgan Stanley, J.P. Morgan and CMB International are joint sponsors for the proposed listing.

According to the filing, tech giant Tencent and online booking service provider Ctrip.com International, Ltd are two major shareholders of the company. 

Tongcheng-Elong was formed after a merger between Tongcheng and eLong, which was completed in March 2018. 

Before the combination, eLong, as one of the top online travel service platforms, went public on Nasdaq early in 2004 and was taken private in 2016, one year after its rival Ctrip became eLong's largest shareholder with a 37.6 percent stake in it.

Originally a leading travel booking website, Tongcheng received a series of investments from tech giant Tencent in 2012-2016.

The merged entity integrates Tongcheng and eLong's resources in various fields including transportation and hotels. 

Tongcheng-Elong now offers transportation ticketing and accommodation reservation services on online platforms, which consist of their Tencent-based platforms, mobile apps and websites. 

It is noteworthy that large shareholder Tencent brings substantial traffic to the new firm via its social platforms.

Based on a business cooperation agreement between Tongcheng-Elong and the tech titan, the OTA has acquired the right to solely operate the "Rail & Flight" and "Hotel" portals in the mobile payment interfaces of WeChat and Mobile QQ. 

The huge traffic fuels the fast-growing user base of Tongcheng-Elong. The average monthly active users of Tongcheng and eLong combined increased with a compound annual growth rate (CAGR) of 16.9 percent to reach 121.2 million last year, as compared with 88.7 million in 2015. During the same period, the combined average monthly paying users rose from 3.9 million in 2015 to 15.6 million in 2017, representing a CAGR of 99.6 percent.

The surging number of users is expected to drive the revenue growth of Tongcheng-Elong. The OTA reaped 5.2 billion yuan (749.9 million U.S. dollars) in revenue last year, shows the prospectus. The growth rate of the revenue is predicted to reach 51.65 percent, 40.85 percent and 29.4 percent in 2018, 2019 and 2020, respectively, according to a research report from China Securities Co.

A number of Chinese companies backed by Tencent have either got listed or are planning IPOs this year. Tongcheng-Elong is the fourth WeChat ecosystem-based firm that files for IPO, following Youzan, Pinduoduo, and Weimob.

Email: zhanglingxiao@nbd.com.cn