Huaqiang Fangte (834793): Financing capacity supports future expansion speed
The company’s recent situation The CSRC has accepted Huaqiang Fangte’s “IPO and listing on the GEM” materials to comment on unique theme park models: 1) Huaqiangfang’s specific location is a theme park in China’s third and fourth tier markets, avoiding the theme of first and second tier marketsThe fierce competition in the park can also benefit from the demographic dividend of the third and fourth tier markets in China.
2) In the “2018 Global Theme Parks and Museums Report” released by AECOM, Huaqiang Fangte ranked fifth in the world with 42.07 million tourists, which is the fifth consecutive year.
The # 1 Disney Group visitor in 20181.
With 5.7 billion person-times, Huaqiang Fangte’s tourist volume reached 27% of Disney’s.
3) Disney usually uses IP. Huaqiang Fangte uses Chinese traditional cultural stories as IP and uses special film technology to perform interpretation. This reduces the knowledge of IP creation and can be copied in batches, which has the advantage of business model.
Rapid expansion requires a lot of funds: 1) Huaqiang Fangte has built 20 theme parks across the country. The company plans to quickly build 30-40 in the next few years. We expect to build 4 themes in Jiayuguan, Changsha, Handan, Jingzhouparadise.
The company also looks forward to overseas expansion.
2) The theme park is an asset-heavy project.
In 2018, the company had 1 billion fixed assets, accounting for 56% of total assets; depreciation of fixed assets accounted for 18% of total revenue.
3) The company’s future planning requires a large 无锡桑拿网 amount of asset investment.
The company raised funds in 2016 and 2017.
As the financing capacity of the new three editions declines, the company needs to realize new financing through IPO.
The company is currently planning an IPO and the shares have been suspended.
Due to a three-year audit, the company has recently made error adjustments to the three-year statements for 2016, 2017, and 2018 (the net profit adjustment is small and not significant).
On June 20, the China Securities Regulatory Commission disclosed that the China Securities Regulatory Commission had revoked the materials of Huaqiang Fangte Culture and Technology Group Co., Ltd.’s IPO and listing on the Growth Enterprise Market.
It is estimated that the EPS forecast for 2019/20 is maintained at 0.
Maintain Outperform rating and 深圳桑拿网 target price of 16.
00 yuan, corresponding to 18x / 16x 2019 / 20e P / E, 19% increase space.
The company currently expects 15x / 13x 2019 / 20e P / E.
Risks and severe weather; the animation industry is developing less than expected; international theme parks have accelerated their entry into China.