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Travel agency plans IPO to fund expansion

China's top travel agency plans to launch an initial public offering in Shanghai this week to raise about 1.7 billion yuan (US$249 million) to expand business.

China International Travel Service Corp will start book-building today to issue as many as 220 million yuan-denominated A shares, or 25 percent of its expanded capital after the IPO, it said in a prospectus to the Shanghai Stock Exchange today.

The company wants to expand its agencies both at home and abroad, improve service and open more duty-free shops.

"The projects will help China International Travel grab more clients as well as penetrate into more businesses in the tourism industry chain," said Shen Zhouxiang, an analyst at China Securities Research.

Its profit in 2008 reached 221 million yuan, compared with 217 million yuan in 2007, according to its prospectus.

"We estimated that the company's net income will reach 317 million yuan, rising 43.4 percent from a year earlier, or 0.36 yuan per share," said Shen.


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