Haichang Ocean Park (2255 HK) With the Gradual Recovery of Tourism Demand after the Pandemic, Performance Is Expected to Rebound July 26, 2023 268

PSR Recommendation: BUY Status: Maintained
Target Price: HKD1.50

Company Profile
Haichang Ocean Park Holdings Ltd. is a leading marine-life theme park developer and
operator in China. As at 31 December 2022, the Group owned and operated six marine
culture-based theme parks and one theme park under construction, and authorized four
theme parks to use the brand of “Haichang”.
Investment Summary
Three-year Pandemic Has Caused Pressure and Significant Decline in Performance
The revenue of Haichang Ocean Park decreased by 67.8% to RMB793 million (RMB, the
same below) in 2022 as compared to the previous year, mainly due to the recurring
pandemic affecting the prevention and control guidelines and requirements of the relevant
authorities in various regions, as well as the sell-off of some of the parks at the end of 2021.
Shanghai Haichang Ocean Park, the regional focus, had only 280 operating days in 2022,
compared to 364 and 289 in 2021 and 2020, respectively. The EBITDA and net profit
attributable showed a loss of RMB773 million and RMB1,396 million, respectively, compared
to a profit of RMB2.17 billion and RMB845 million in the same period a year earlier.
Excluding the impairment and divestiture of assets, the adjusted EBITDA was -RMB423
million, compared to RMB527 million in the same period of the previous year; the adjusted
net profit attributable was -RMB1.06 billion, compared to -RMB570 million in the same
period of last year.
From a perspective of department, excluding the RMB837 million revenue gap generated by
the divestiture of parks in 2021, operating revenue of the retained parks for the year 2022
declined by 24.2% to RMB749 million, from RMB988 million in the previous year. The share
of the revenue in the total rose to 94.4%. Moreover, revenue from the tourism & leisure
services and solutions department decreased to RMB44.0 million, or 5.6% of the total,
mainly due to lower delivery of such projects caused by the pandemic, while the decline is
partially offset by that from Haichang Aquarium/Discovery Pavilion. Finally, there was no
revenue from property sales during the period, compared to RMB584 million from the
department in the same period last year.

About the author

Profile photo of Zhang Jing

Zhang Jing
Phillip Securities (HK)

Bachelor Degree in Tongji University of Engineering; Master Degree in East China Normal University of finance. Currently covering the automobile and air sectors. She has years of experience in investment research and is good at combining analysis for the companies with industry prospects.

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