Expanding the New Silk Road Territory
ShenzhenShenzhen, January 6, 2015 /PRNewswire/ -- Temasek International's acquisition of Xinxin Travel became a highlight in the travel industry in 2014. Following that, it also acquired "Hangzhou Fanmei Aviation International Travel Agency Co., Ltd." Just after the start of 2015, Temasek International once again invested tens of millions in a major move within its "Grand Tourism Ecosystem" strategy. On the evening of January 5, Temasek International issued an announcement, one of which involved injecting a total of 55 million yuan into its wholly-owned subsidiary, Chongqing Temasek Air Ticket Service Co., Ltd. (hereinafter referred to as "Chongqing Temasek"), and through Chongqing Temasek, acquiring a 60% stake in Chongqing Xinganxian International Travel Agency Co., Ltd. (hereinafter referred to as "Xinganxian Travel Agency") and injecting additional capital into it.
Currently, Xinganxian Travel Agency owns two subsidiaries: Chongqing Lianfeng Air Service Co., Ltd. (hereinafter referred to as "Lianfeng Air") and Chongqing Fengxing Tianxia Travel Agency Co., Ltd. (hereinafter referred to as "Fengxing Tianxia"). Among them, "Lianfeng Air" holds a Class-A air ticket sales agency qualification and is the largest ticket agent in the Chongqing region, with an annual air ticket transaction volume of approximately 2 billion yuan. "Fengxing Tianxia," on the other hand, specializes in the operation of domestic and international group and independent travel products across various routes. Its outbound travel business has been growing year by year, and it has established solid group travel partnerships with over 2,000 travel agencies across the country, making it the largest, most product-diverse, and most channel-complete comprehensive travel service enterprise in the Chongqing region. Through this transaction, Xinganxian Travel Agency will leverage Temasek International’s national presence to access nationwide premium air ticket products, expand its customer resource network, and enhance its diversified profitability.
The value of this transaction to Temasek International is mainly reflected in the following three aspects:
1. Improving the Product Supply System and Enhancing Profitability
Xinganxian Travel Agency not only possesses competitive air ticket products in the Southwest region but also has a mature travel business, having developed numerous travel products and tourism resource access. Its inclusion will not only strengthen Temasek International’s competitiveness in air ticket products and increase its market share in the Southwest region, but also broaden the company’s product line and increase the proportion of travel products. Not only the B2B business, but Temasek International’s TMC and OTA businesses will also benefit from reduced procurement costs for travel products and the ability to offer more diverse products to customers, thereby improving overall competitiveness and ultimately increasing the company’s profitability and valuation.
2. Further Building the “Grand Tourism Ecosystem”
Xinganxian Travel Agency is already a supplier to Xinxin Travel. This transaction will further tighten the relationship among Temasek International, Xinxin Travel, and Xinganxian Travel Agency. Temasek International and Xinxin Travel will provide Xinganxian Travel Agency with broader offline and online channels. Through Xinganxian Travel Agency, Temasek International will realize value realization on the Xinxin Travel platform. With an operational platform and supply entities in place, Temasek International will have reliable allies for innovation and development in the travel services field, enabling it to refine its strategic layout in the tourism market, build capabilities in travel agency products, effectively expand market space, and foster a robust tourism ecosystem.
3. A Successful Model for Transformation and Upgrading
Xinganxian Travel Agency is one of the earliest companies in the industry to successfully transform from the air ticket sector to the tourism industry, evolving from a regional leader in air ticket distribution to a regional leader in the travel agency sector. Through this investment, Temasek International can use Xinganxian Travel Agency as a transformation model, replicating and promoting its successful experience across other subsidiaries, thereby driving the diversified development of the entire Temasek International group.
Temasek International’s strategic goal is to actively develop the tourism market, grow the industrial chain finance, and is committed to building a “Grand Tourism Ecosystem.” The acquisition of Xinganxian Travel Agency will help Temasek International further enrich its product line, extend its industrial chain, increase its market share in the Southwest region, improve the company’s profitability, and further leverage the unique advantages of its “Travel × Internet × Finance” business model. By fully integrating acquired resources, it will inject new momentum into the company’s development and achieve the long-term strategic goal of the “Grand Tourism Ecosystem.” The country has emphasized the development of the New Silk Road Economic Belt. Temasek International had previously completed its layout in Sichuan, Chongqing, Shaanxi, and Xinjiang. With the addition of Chongqing Xinganxian Travel Agency, the strength of its western service network will be further solidified, while also opening a window for external development, laying an important foundation for future international expansion.