Per reporter: Zhu Peng Per editor: Chen Junjie
From wind and rain to public health events. The "fragility" of the cultural tourism industry, which is extremely dependent on offline passenger flow, is intuitive and direct. For most theme parks in The country, the last time they received visitors was about until late March this year. Fortunately, the signal of the theme park's recovery is finally lit up again.
It is reported that Universal Beijing Resort, which has been closed for 45 days, will resume opening on June 15. Shanghai Disney Resort also resumed operations on some of its projects on June 10.
But the intermittent shutdown pressure caused by the pandemic for more than two years has remained on the shoulders of the companies behind the major theme parks. Not long ago, Huaqiang Fantawild (NQ834793, stock price 9.18 yuan, market value of 8.92 billion yuan) released a fixed increase plan, which intends to raise no more than 1.68 billion yuan. With the "bear haunting" IP, which has won the top five global theme parks for four consecutive years, Huaqiang Fantawild, which has both public popularity and business strength, also needs to raise funds to relieve pressure.
Huaqiang Fantawild lost 245 million yuan in net profit attributable to the mother last year
According to the announcement, the funds raised by Huaqiangfang's specific issuance of shares will be used to repay bank loans/borrowings and supplement working capital.
The estimated use of $800 million in the proposed funds to supplement working capital Image source: Screenshot of the announcement
Lin Huanjie, president of the China Theme Park Research Institute, said in a telephone interview with the Daily Economic News reporter on June 8: "Everyone will want to go to the theme park, but it is not just needed, it is a spiritual enjoyment." This year's domestic theme parks are very difficult, and I think it is very good to recover to 70%-80% of the same period last year in the second half of the year. ”
The small increase in revenue and the sharp decline in net profit are the most conspicuous summaries of Huaqiang Fantawild's financial data for 2021 and the first quarter of this year.
According to Huaqiang Fantawild's 2021 annual report, the company's annual revenue was 4.497 billion yuan, an increase of 11.82% over the same period of the previous year, but the net profit attributable to the shareholders of the listed company was 245 million yuan. In the first quarter of this year, the company achieved revenue of 854 million yuan, an increase of 5.67% year-on-year, but the net profit attributable to the shareholders of the listed company was about 140 million yuan, compared with a loss of 56 million yuan in the same period last year.
Image source: Huaqiang Fantawild official website
Huaqiang Fantawild's main business is cultural and technological theme parks and cultural content products and services. In 2021, the revenue of the theme park business was 3.724 billion yuan, accounting for about 82.81% of the overall revenue. Lin Huanjie, who has been studying theme parks, tourism real estate and regional economic fields for many years, told every reporter that Huaqiang Fantawild's business model is relatively healthy, and its income structure is diversified, in addition to theme parks, there are other incomes such as digital movies. "Fundraising is conditional, you have to have projects, assets, IP, and the ability, otherwise the CSRC will not agree."
According to the annual report, Huaqiang Fantawild's cultural content product business has a revenue of 748 million yuan in 2021, although there is a gap between the absolute value and the theme park business revenue, but the gross profit margin of 74.6% is 34 percentage points higher than the overall gross profit margin of the theme park business.
When it comes to Huaqiang Fantawild's cultural products, it is impossible to avoid "bear haunting". This domestic original animation IP, which was born in 2012, has contributed national-level IP such as "Bald Head Strong", "Bear Big" and "Bear II". In the past 10 years, "Bear Haunting" has a total of 10 TV series, 8 movies and other content products. According to Maoyan Data Professional Edition, the cumulative box office of 8 films is 4.243 billion yuan, and the average box office of the films exceeds 500 million yuan. In the 2022 Spring Festival file under pressure in the film market, the latest "Bear Haunting • Return to Earth" received 977 million box office, which shows the long-term gold absorption of the IP.
Some of the "Bear Haunting" series of movie posters Image source: Douban
The success of film products is evidence of the diversification of its business, but when the main business is facing challenges, the high-profile side business is still difficult to take on.
In the fundraising announcement, Huaqiang Fantawild said that as of the end of March 2022, the company's total liabilities reached 14.789 billion yuan, an increase of 2.560 billion yuan over the end of 2020. Among them, short-term borrowings were 4.924 billion yuan, an increase of 2.164 billion yuan from the end of 2020. It is reported that in the past two years, Huaqiang Fantawild has not suspended its investment in theme park business due to the epidemic.
In 2021, it opened new theme parks in Ganzhou, Taiyuan, Ningbo and other places, which brought some revenue growth to the company. A few days ago, Huaqiang Fantawild also announced that the Zigong Fantawild Dinosaur Kingdom will open on June 18. The total investment of the theme park is 3 billion yuan.
Persevering forward in uncertain situations requires courage and, more importantly, funding. Perhaps this is also one of the important reasons for its fundraising.
"High investment, large scale, slow recovery and high risk are the major characteristics of the theme park industry. If the theme park does not have other product formats to support, the operating pressure will be very large. Lin Huanjie said.
"Domestic theme parks will be reshuffled in the first half of next year"
According to the 2021 China Theme Park Competitiveness Evaluation Report, the number of existing large and extra-large theme parks in the country accounted for 73.6%. The 64 theme parks selected for the report received a total of 67.6883 million visitors in 2020, down 50.43% from 2019; The total revenue was about 9.48 billion yuan, down 49.87% from 2019.
Huaqiang Fantawild, which ranks in the first echelon of domestic theme parks, has the confidence to raise funds from the market because of the foundation it has laid, but this option is not easy to copy.
"Sell assets" is another straightforward and efficient option.
Another major theme park company in China, Haichang Ocean Park (HK02255, hk$7.16 and market capitalization of HK$28.64 billion), sold 100% of its shares in four completed ocean parks in Wuhan, Chengdu, Tianjin and Qingdao last year for a total of 6.53 billion yuan, and a 66% stake in a project under construction, Zhengzhou Haichang Ocean Park.
According to the financial report, Haichang Ocean Park's annual revenue in 2021 was 2.46 billion yuan, an increase of more than 110% year-on-year, and the net profit was 834 million yuan, compared with a loss of 1.478 billion yuan in the same period last year.
In Lin Huanjie's view, theme parks such as Haichang Ocean Park are under greater pressure to operate under the epidemic. "In the park dominated by mechanical equipment, operators can cut off power and leave only the necessary security guards and management personnel. But for theme parks with animals, such as Haichang and Chimelong, they also need to raise animals, care and maintain, and this part of the expenditure cannot be reduced."
Image source: Shanghai Haichang Ocean Park official website
From the current point of view, the theme park market is expected to recover in the second half of the year, but Lin Huanjie does not think that there will be a large-scale garden boom. "Disney and Universal may have a wave of craze, but the deadline will not be very long. Because theme parks are not a limited-time show, if you miss it, you won't have it. ”
At a time when entertainment options are plentiful, competing for limited consumers is the biggest goal of all entertainment industries. In the fierce competition, companies with IP are naturally easy to come out on top.
Shanghai Disneyland opened in 2016 and became profitable in its first full fiscal year. Three years later, Shanghai Disneyland's annual revenue reached 7 billion yuan, becoming the world's most profitable theme park for Disney Group (DIS, stock price of $107.34, market value of $195.5 billion). Disney's strong and rich IP power makes the theme park business look so easy to do and easy to make. In 2021, Universal Studios Beijing opened and set off a frenzy. For China's huge consumer base, the international giants have taken the lead in satisfying their fantasies of theme parks.
Lin Huanjie told every reporter that although international theme parks are also facing operational pressure, their high-quality brand influence, content advantages, management capabilities, and related supporting facilities, compared with a number of local theme parks, have been born to be "rich second generation".
Through analysis, he speculated that in the future, there may only be less than 10 theme park brands in the Chinese market. "The participation of the world's first-tier theme parks in competition has boosted this process in disguise, and the epidemic factors have also affected. I think the reshuffle of domestic theme parks is inevitable, and it will come quickly, and the situation should be very clear in the first half of next year. Lin Huanjie said.
The town-style theme park is the future, and at this stage, it cannot borrow the wind of the meta-universe
After the special test of the epidemic, what will the future form of the more risk-resistant theme park look like?
Lin Huanjie believes that it must no longer be a single park business model, because it will only encounter more problems and bear greater operational pressure. "In the future, the characteristics of group operation will be more prominent, a company alone to fight a small trouble, encounter such difficulties as the epidemic will be finished."
Lin Huanjie described his idea to every reporter. The future theme park will be a tipping point for a comprehensive area, just like a town with content, entertainment, health care, commerce, real estate, etc., in which all kinds of consumer needs can be met. The threshold for construction will also be higher, and developers will not only have economic strength, but also have the ability to operate. It can be a model led by a large company and involved by multiple enterprises, but it must be planned as a whole.
Lin Huanjie particularly emphasized the difference between this model and some of the current characteristic towns. He believes that the new generation of theme park towns must be based on theme parks as the core, and must first have a brand with traffic and attractiveness, have IP, have content stories, and then do related extension supporting facilities, rather than simply concentrating various industries. "Just like a banquet, the main course is attractive, everyone will have expectations, and the side dishes will not be snubbed."
In this concept, strong IP is the core, otherwise it is no different from the characteristic towns that are sporadically promoted everywhere. To explore this model, international theme parks undoubtedly have a better position. But in Lin Huanjie's view, the current stage is also an excellent window period for China's local theme parks.
Under the epidemic, the confidence of international investors will inevitably be shaken. "The market itself is still there, the demographic dividend is still there, and China will be the main battlefield of the future world theme park." Lin Huanjie believes that "originally there was little room for competition, but now it will be bigger, and local theme parks may get a window period for competition." ”
Innovation is the way for all walks of life to survive, and the cultural tourism industry is no exception. In Huaqiang Fantawild's 2021 annual report, the star concept "meta-universe" was mentioned again.
It is reported that Huaqiang Fantawild has established the Meta-universe Application System Research Institute, and looks forward to exploring its future development direction and market prospects through the construction of a meta-universe platform for the cultural tourism industry, forming a reasonable commercial profit model.
But the combination of metaversity and cultural tourism may not be easy. In March this year, Landscape Byd (SZ300844, stock price of 26.81 yuan, market value of 1.73 billion yuan) whose main business is landscape design received a regulatory letter from the Shenzhen Stock Exchange for signing a strategic cooperation agreement with other companies on the Meta-Universe Comprehensive Resort Tourism Zone. The regulatory letter stated that it did not fully prompt the company's deficiencies in resources, technical reserves and possible operational risks in the field of "meta-universe".
Lin Huanjie also believes that at this stage, it is not feasible to use the meta-universe to innovate in the theme park. "Some time ago, I consulted two Canadian engineers who are very professional in virtual reality technology, and mentioned to them the combination of meta-universe and theme parks. They said the idea was good, but the cost would be very high. The first is that the computing power of the computer is very large, and the second is that the electricity consumption will be very large. ”
In his view, at this stage, many so-called metaversms are just 4D, "I think this direction is a good direction, but how to create high benefits with low cost still needs time to test." ”
Cover image source: Daily Economic News Photo by Liu Guomei
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