On May 11, Shanghai Disneyland opened its doors as the world ’s first theme park to resume operations. The first day of the ticket sold out online in three minutes. Hong Kong Ocean Park, another representative theme park that has been in operation for more than 40 years, is on the verge of bankruptcy.

Kong Lingcheng, chairman of the board of directors of the Ocean Park in Hong Kong, said bluntly at the press conference, "Current cash flow can only be operated until the end of June, so government cooperation is urgently needed to overcome the difficulties."

For a time, the outside world was shocked, and this tourist must go to Hong Kong's online celebrity punching place has quietly reached the difficult moment of life.

Theme parks have been the subject of stories that many companies love to tell in the past decade. Real estate companies represented by Wanda Group, Overseas Chinese Town A (000069.SZ), Sunac China (01918.HK), etc., took the name of Cultural Tourism Real Estate to realize the "theme park + real estate" landing; the other way is Similar to Huaqiang Fangte (834793.OC), Chimelong Group, Songcheng Performing Arts (300144.SZ) and other entertainment and theme park enterprises, the expansion of "theme park + IP derivatives" was realized.

The entrants from all walks of life have almost the same dream: to build classic IP like Disney and achieve asset-light expansion.

Bankruptcy

The Hong Kong Ocean Park carries many childhood memories of Hong Kong people and even mainland tourists. Playing in the waterfront park and peak park of Ocean Park for a day, and returning home happily is something many people do when they go to Hong Kong.

The Hong Kong Ocean Park, located in the south of Hong Kong Island, was established in 1977 and covers an area of less than one million square meters. It is funded by the Hong Kong Jockey Club and constructed by the government free of charge. It is positioned as a public recreation and education park managed by the Hong Kong Ocean Park Corporation. It has been closed for more than 100 days since the outbreak of the new coronary pneumonia outbreak on January 26.

This quickly accelerated the financial deterioration of Hong Kong Ocean Park.

Kong Lingcheng said at a press conference on May 11 that "Ocean Park, like many companies, is facing the toughest financial challenge ever. The current cash flow can only be operated until the end of June, so government collaboration is urgently needed to overcome the difficulties. "

This is the first time since Hong Kong Ocean Park was established that it needs to apply for funding. If funding is not available in June this year, what is awaiting the Ocean Park in Hong Kong is the closure and liquidation. This means that nearly 2,000 employees will be unemployed.

Before the outbreak, the profitability of Hong Kong Ocean Park was not optimistic.

As of the end of June 2019 in the 2018-19 fiscal year, Ocean Park recorded a loss of HK $ 557 million, which was the third consecutive year that Ocean Park recorded a loss. In mid-January 2020, just before the New Crown Outbreak, Ocean Park had predicted that the cash deficit from operating activities in fiscal year 2019-20 would exceed HK $ 600 million. After the outbreak, the Ocean Park closed for more than three months, not only cut off the source of income, but also faced a fixed expenditure of 140 million Hong Kong dollars per month.

This has also aroused continued concern about the Ocean Park in Hong Kong. Most supporters uphold the government's capital injection to help stabilize employment. Ocean Park is one of Hong Kong's iconic attractions. There are also many opponents.

In an interview with the First Financial Reporter, a Hong Kong person close to the Ocean Park in Hong Kong bluntly noticed the existence of different voices, "Ocean Park has become a cultural IP in Hong Kong, and the government is unlikely to save. But there are The existence of different voices does indeed reflect the reality of the theme park as a loss-making hole. "

Cultural Examination

The survival of the theme parks represented by Ocean Park in Hong Kong can't avoid a Disney dream.

Disney has grown from an animation studio to one of the world's most powerful brands with brand power and commercial value. It successfully crosses the cycle and breaks the cultural borders, sitting on Snow White, Mickey Mouse Mickey, Rabbit Judy and many other IPs, and successfully leveraging the commercial layout of film and television, entertainment, theme parks, IP derivatives, etc. in a light-assist model to culture international Output. Such a successful business story that integrates business operations, culture and entertainment, and has no taste of cultural hegemonism is fascinating.

Chinese theme park operators have more or less learned from Disney's business model.

All the way is similar to Wanda Group, OCT, Sunac China, etc. represented by the real estate business sector, its cultural tourism real estate business segment, many cultural tourism city, theme parks and other projects to achieve the "theme park + real estate" landing; the other way is Similar to Huaqiang Fangte, Chimelong Group, Songcheng Performing Arts and other entertainment, theme park enterprises, the realization of "theme park + IP derivatives" landing.

There are differences in the layout of the theme park between the two companies. Housing companies mainly invest in the construction of theme parks to meet the matching needs of local governments such as cultural tourism, hotels, and service industries, and create tax and employment to achieve low land prices to obtain land. When the theme park project matures, the industry is activated and the land value is increased, the government and housing companies will achieve a win-win situation.

Huaqiang Fangte, etc. mainly relies on self-built or cooperation with local governments to land theme parks, and output IP products to create a whole industrial chain integrating "creative, R & D, production, and sales", and form two main players of cultural content products and services and theme parks. Business.

The same way, the land value cannot be circumvented. As Chinese companies have a certain gap with the international in terms of their own IP creation, derivative development, and commercial operation capabilities, the operating level of theme park companies still has a gap with the international. The investment return period of cultural tourism real estate projects is long, and the requirements for corporate capital chains, especially cash flow, are relatively high.

At the beginning of entering the theme park, Wang Jianlin, the head of Wanda Group who said that he would catch up with Disneyland in China, had sold most of the cultural tourism real estate assets in mid-2017, and made it clear that "the cultural tourism project was sold to Transformation of asset-light business and debt service. "

Due to the epidemic situation, it is difficult to open the theme park for business, and many cultural tourism real estate companies have also been affected. The real estate giant OCT A (000069.SZ) reported in the first quarter of 2020 that the net cash flow from operating activities decreased by -1093.83% year-on-year to -127.87 billion yuan. Several core financial indicators such as operating income and net profit attributable to shareholders of listed companies all recorded year-on-year declines.

Many theme park operators have also used their own IP for light asset transformation in recent years, but the overall situation is not very optimistic.

Take the example of Huaqiang Fangte, which has done a relatively early stage in the transformation of light assets, since 2010, the proportion of non-current assets that has continued to exceed current assets has not changed. In the 2019 annual report, non-current assets accounted for 91.47% of total assets. Among them, fixed assets and construction in progress alone accounted for 67.86% of total assets in non-current assets. This means that it has not yet got rid of the situation of heavy asset expansion.

Although the theme park companies have their own pain points to be overcome, but because of the epidemic, they have shaken their confidence in business promotion. Several inland theme parks have been restarted around May 1st. At present, about 90% of the attractions under the OCT have been opened; and the Chimelong Group's Guangzhou Chimelong Wildlife World, Guangzhou Chimelong Panda Hotel, Zhuhai Chimelong Ocean Kingdom, etc. have also resumed opening. However, it will take time for these theme parks to fully restore their operating levels.

In terms of the number of visitors, according to the prevention and control requirements put forward by the Ministry of Culture and Tourism at the press conference of the State Council ’s new office on April 30, the current tourism resources are limited. Among them, one is the resource limit. Due to the epidemic prevention and control requirements, a considerable part of the indoor area of the scenic spot cannot be opened temporarily. The second is the limit of the number of people. The number of tourists in the scenic spot cannot exceed 30% of the maximum carrying capacity of the scenic spot. At the same time, the scenic spot should implement an appointment system and implement appointment opening.

At present, the restarted Chimelong Group, the first batch of two theme parks and two hotels that are open, they strictly control the daily reception of tourists to not exceed 30% of the approved maximum carrying capacity, and some indoor closed venue projects and indoor The performing arts projects, such as circus performances, are temporarily closed to the public for the sake of epidemic prevention. Similar conditions exist in multiple theme parks, and there is still a distance before full restoration of business.