Rising Visitor Numbers at Haichang Ocean Park Highlight Potential for Long-Term Value

Recently, the government has introduced a series of significant policies to promote economic recovery, with stimulating consumer spending at the core. Among these, tourism consumption holds an important position in resident consumption. With the recent warming of the A-share and Hong Kong stock markets, along with a significant rise in global Chinese assets, the wealth effect is evident and will undoubtedly further stimulate consumer purchasing power. In the medium to long term, as the consumption capacity of residents increases, tourism consumption is also expected to usher in broad development prospects.

This trend can be clearly seen from the tourism data of the just-concluded 2024 National Day holiday. According to the estimated data released by the Ministry of Culture and Tourism, this year's National Day holiday saw 765 million domestic tourism trips, a significant increase of 5.9% compared to the same period last year, and a 10.2% increase compared to the same period in 2019. This reflects the comprehensive recovery of the domestic tourism market, its vigorous development momentum, and vast potential.

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Against the backdrop of the continuous improvement of the cultural tourism market's prosperity, Haichang Ocean Park (2255.HK) has won the enthusiastic pursuit and high praise of a wide range of tourists with its unique charm, colorful activities, and comprehensive tourism services, becoming a popular check-in spot for visitors. In terms of operations, Haichang Ocean Park has also achieved many highlights, fully demonstrating its strong competitiveness in the cultural tourism market and broad development prospects.

In the future, Haichang Ocean Park will continue to achieve platform-based development of marine entertainment through innovation-driven strategies. At the recently held 2024 China Tourism and Leisure Industry Development Conference, Haichang Ocean Park's Vice President, Fang Hongfeng, clearly stated that Haichang Ocean Park will continue to base its operations on marine culture, initiating a new strategic model with three major business ecosystems in a tripartite stand, through multi-dimensional measures such as cultural tourism services and solutions, IP operations and new consumption, and theme park operations, to ride the momentum and achieve platform-based development of marine entertainment, providing visitors with a richer and higher quality of tourism, leisure, and entertainment experiences.

I. Significant surge in National Day tourists, multi-product matrix satisfaction, and operational strength highlighted

In terms of specific data, according to the news released by Haichang Ocean Park, during the 7-day National Day holiday in 2024, the various parks and cultural tourism projects under Haichang Ocean Park received more than 800,000 visitors, a 7.1% increase compared to 2023. This data not only highlights the brand influence of Haichang Ocean Park in the cultural tourism market but also reflects its excellent capabilities in tourism services and event planning.

In terms of visitor reception, Shanghai Haichang Ocean Park performed particularly well. On October 2nd and 3rd, the daily visitor flow at Shanghai Haichang Ocean Park both exceeded the 50,000 mark. Its supporting hotels, Jin Qiao · Haichang Penguin Resort Hotel, Shanghai Haichang Ocean Resort Hotel, and Ultraman Theme Hotel, from September 28th to October 7th, maintained an occupancy rate of over 95% for 10 consecutive days, with a room rate increase of 21% compared to the summer vacation.

In addition, Zhengzhou Haichang Ocean Park also achieved good results. During the National Day holiday, Zhengzhou Haichang Ocean Park received more than 160,000 visitors in total. Its supporting Zhengzhou Haichang Ocean Park Resort Hotel and Ultraman Theme Hotel were fully booked throughout the holiday, fully demonstrating the strong strength of Haichang Ocean Park in the hotel business.

Among them, Shanghai Haichang Ocean Park launched the "Killer Whale National Music Concert," with ten thousand people singing together in the killer whale theater, with red flags and killer whales leaping in a dazzling display. In the Volcano Shark Pavilion's Mermaid Light and Shadow Hall, "Mermaid Fairy Tales" were performed, with professional actors wearing national costumes, performing national styles underwater.

In addition to the popularity of theme parks and aquariums, Haichang Ocean Park has also made new progress in light asset layout. Recently, Haichang Ocean Park launched a new high-end hotel product, "TheArkHouse Yi Fang" hotel, scheduled to open in July 2025. The high-end hotel project can not only meet the vacation needs of high-net-worth families but also increase the visitor flow and revenue of theme parks and aquariums through ticket linkage and other methods, helping the company to achieve more stable and sustainable development in the future.It is not hard to imagine that with the increase in the number of tourists, revenues from park tickets, catering, shopping, and other sources will also correspondingly increase, which can bring performance growth to Haichang Ocean Park. In addition, the booming hotel business has also brought considerable profits to the company. The growth of these revenues can enhance the company's profitability and further strengthen its competitiveness in the cultural tourism market.

II. Benefiting from Multiple Logics in the Future, Long-term Value Further Demonstrated

China's tourism industry has actually become one of the world's second-largest and fastest-growing tourism markets. According to the "2024 Economic Impact Trend Report" released by the World Travel and Tourism Council (WTTC), China's tourism industry contributed $1.3 trillion to GDP in 2023. The WTTC predicts that in the next decade, China is expected to surpass the United States to become the world's largest tourism market, and the global tourism industry landscape will undergo profound changes.

In the medium and long term, as the Federal Reserve enters a rate-cutting cycle, since September 25, multiple departments including the central bank, the National Development and Reform Commission, and the Ministry of Finance have密集ly released unprecedented stimulus policies, driving a strong rebound in the capital markets of mainland China and Hong Kong. The strong rebound in the capital market has significantly boosted residents' and businesses' confidence in the economic recovery outlook in the short term.

In addition, data shows that the proportion of consumption in GDP in developed countries exceeds 70%, while in China it has been around 50% in recent years. Experts say that given China's current level of development, it should reach around 60% in the next five years. With the increase in residents' disposable income and the transformation of consumption concepts, the demand for leisure tourism is growing, and consumers are paying more attention to the quality and experience of tourism.

Secondly, the government has been increasing its support for the cultural tourism industry in recent years, introducing a series of policies and measures to promote the integration of culture and tourism. According to Dongwu Securities, the total number of people traveling during holidays in 2024 and the total tourism revenue have both significantly increased, and the average tourism expenditure per tourist has also increased, further confirming the rise in industry prosperity.

Looking at Haichang Ocean Park's own business model characteristics, the reasons for its growth and value demonstration mainly include the following points:

Haichang Ocean Park has a diversified matrix of cultural tourism products and IPs, including theme parks, aquariums, hotels, etc., which can meet the needs of different tourists. At the same time, the company continues to innovate in cultural tourism products, enhancing tourists' travel experiences. The company has successively signed contracts with top international IPs such as "Ultraman" and "One Piece," leveraging the momentum of high-quality IPs to expand ticket revenue and increase the volume of secondary consumption, continuously exploring market value, and continuously enhancing the company's profitability.

The financial report for the first half of 2024 shows that Haichang Ocean Park achieved a revenue of 800 million yuan, a year-on-year increase of 6.8%, with revenue from park operations amounting to 740 million yuan, a year-on-year increase of 5.5%; among them, Haichang Ocean Park's new growth engine OAAS (Cultural Tourism Services and Solutions) and IP operations have shown their effects, with revenue from OAAS in the first half of the year amounting to approximately 63.935 million yuan, a year-on-year increase of 25.05%.

Faced with consumers' increasing pursuit of personalized, diverse, and quality products, and a focus on interactive experiences and emotional feelings, Haichang Ocean Park actively promotes digital transformation, which can more accurately grasp tourists' needs, provide personalized travel products and services, and thereby enhance tourists' participation and interactivity.Currently, Haichang Ocean Park is capitalizing on the momentum, leveraging the trend, transitioning from market recovery to striving for breakthroughs in high-quality development, shaping a brand-new "field energy," and focusing on building a technology "field," an emotional "field," and an entertainment "field."

For instance, in the construction of the technology field, Haichang Ocean Park has achieved intelligent upgrades in experience, management, and marketing, advancing technologies such as bionic robots, technological mecha devices, and AI technology applications. These technologies empower core project operations to become blockbuster products, promote the transformation and value-added of technology, and form new momentum for product development.

Overall, new technologies and new business forms driven by digital technology, when combined with the tourism industry, make services more convenient and visitor experiences better. According to People's Daily, China's digital economy reached 53.9 trillion yuan in 2023. Leveraging digital technology, Haichang Ocean Park will undoubtedly face significant development opportunities.