Case Study: Universal Travel Group

Shennan Road, Hualian Center
Shenzhen,
China
Phone: +86-755-83668489

Company Profile

Company : Universal Travel Group
Industry : Consumer Services
Headquarters : Shenzhen, China
Ticker Symbol : UTA
Exchange : AMEX
The Challenge:

Universal Travel Group, a growing travel services provider in the People’s Republic of China specializing in online travel reservations, came to CCGIR Asia in 2008. The Company had many elements to a success story in the making - strong management, a sound growth strategy and was operating in a highly fragmented growing market. However, its valuation was restrained by the fact that it was a thinly-traded over-the-counter stock, which lacked solid exposure to the investment community.

Company management was determined to develop and maintain strong investor communications, increase stock liquidity and trading volume, and upgrade to a senior stock exchange. CCGIR Asia used its expertise and resources and helped Universal Travel Group to develop a compelling investment thesis, maintain consistent communication and disclosure, and strengthen investor confidence.

Universal Travel Group became a U.S. publicly traded company on the Over-the-Counter Bulletin Board in June 2006 through a reverse merger and simultaneously completed a private placement for $0.4 million. The Company had strong fundamentals but light trading volume compared to its peers and no research coverage. In addition, the Company lacked a strong CFO with bilingual capabilities.

CCGIR Asia recommended a multi-pronged strategy as a part of the investor relations program that included the Company hiring a bilingual CFO, conducting road shows, attending conferences with institutional investors, and executing a 3-for-1 reverse stock split to qualify the Company to list on a more senior exchange. CCGIR Asia conducted regular outreach to institutional investors and fund managers to gain valuable feedback, which was incorporated in the Company’s disclosures including press releases, conference call transcripts, and investor conferences. Furthermore, CCG helped the Company to differentiate itself from its competitors by highlighting its effective retail strategy and strong call center base in Shenzhen and Chongqing. The Company’s enhanced investor communication significantly increased investor interest and boosted its trading volume and liquidity. Universal Travel Group was successfully upgraded to the NYSE AMEX on May 28, 2009. Its stock has performed significantly better than its peers and the broad market index, a result of a well developed investor relations program combined with the Company’s strong fundamentals.
The CCG Strategy & Implementation:

CCGIR Asia worked with management to increase investor visibility and the number of shareholders by developing a very clear and concise message for investors outlining the company’s unique market opportunity, management’s ability to successfully execute its growth strategy through managing increased capacity, expanding market penetration and building a high quality brand. CCGIR Asia also worked with management to institute consistent communication with investors through regular quarterly conference calls, regular attendance at investor conferences and road shows in the United States.

The elements of this plan include:

CCGIR Asia introduced Universal Travel Group to more than 10 sell-side analysts and garnered the company invitations to several renowned and highly visible investor conferences in the U.S. and abroad. Universal Travel Group participated in four non-deal road shows and three major investment conferences in 2008 and the first half of 2009, which helped expose the Company to over 45 new funds. CCGIR Asia also set up a virtual road show and introduced the story to a large audience of retail investors.

CCGIR Asia assisted Universal Travel Group’s experienced management team to develop a reasonable financial model in order to provide regular guidance to investors and instill confidence with investors on future financial performance. CCG’s regular communication along with management’s cooperation with investors and fund managers helped address investor concerns and better understand investor perception. CCGIR Asia enhanced investor communication throughout the Company’s upgrading process to the prestigious NYSE AMEX, representing sound corporate governance, trading volume, and high credibility.

CCGIR Asia worked diligently with the Company to best present the key strategies and investment highlights. The Company’s outstanding financial performance combined with high credibility amongst investors is proven by its strong performance in the current volatile markets. Universal Travel Group’s investment story has been very well received by institutional investors, hedge fund managers and investment advisors.

CCGIR Asia arranged road shows targeting high profile institutional funds and money managers, including:

  • Royce & Associates
  • Essex Investment Management
  • Ardsley Partners
  • RBC
  • Oppenhiemer & Co.
  • AWM Special Situation Fund
  • Wellington Investment Management
  • Shannon River Partners
  • Dialectic Capital Management
  • Peninsula Capital Management

CCGIR Asia coordinated Universal Travel Group’s ringing of the opening bell at NYSE AMEX Stock Market. CCGIR Asia successfully promoted Universal Travel Group’s investment thesis through various media placements in tier-one fi nancial outlets, including Bloomberg TV, thestreet.com, Bloomberg News, China Daily, and the Wall Street Journal Online.

The Measurable Results:
  • Sell-side coverage initiated by Emissary Capital.
  • The share price has increased from around $2 post reverse split to over $9 with a 52-week high of $12.60
  • The average daily trading volume has increased more than 7 times to over 160,000.
  • Universal Travel Group upgraded to the NYSE AMEX in May of 2009.
  • Universal Travel Group added to the Russell 3000 Index in June 2009
  • The shareholder base now has an increasing number of institutional holders.
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