It hit the Hong Kong Stock Exchange for the fourth time. This kind of resilience was not common among listed companies in the past.
Viewpoint Real Estate Network On October 22, China Cultural Tourism submitted the prospectus again. This is the fourth time it has hit the main board listing of the Hong Kong Stock Exchange, but the future is still uncertain.
In April 2020, China Cultural Tourism submitted its prospectus to the Hong Kong Stock Exchange for the first time. At that time, the market was still optimistic about the performance of cultural and travel concept stocks in the past few years. After the epidemic, people are also looking forward to the benefits of retaliatory consumption.
The market is speculating as to how quickly this company that carries the cultural and tourism asset package of China Aoyuan Group will complete the bell, and what valuation will it achieve?
But things went counterproductive. In October of the same year, the prospectus submitted by China Cultural Tourism for the first time had been “invalidated”. It immediately resubmitted the new version, but the results did not change much. On April 23 this year, China Cultural Tourism submitted its prospectus for the third time. Now it is the fourth time.
This time, China Cultural Tourism has changed its company name from “China Cultural Tourism Group Co., Ltd.” to “Greater Bay Area Cultural Tourism Co., Ltd.”. The reason is also very simple. In the past, the word “China” seemed too vague, and the name of the cultural tourism in the Greater Bay Area was more focused.
Up to now, almost all of the projects held or operated by the company are located in Guangdong Province, including Qingyuan, Zhongshan, and especially Jiangmen. At the same time, only one project under development outside the province is located in She County, Anhui.
But this seems to be difficult to solve the problem of misalignment between the positioning of cultural tourism in the Greater Bay Area and the reality.
Greater Bay Area Cultural Tourism positions itself as a developer of resort properties located in locations with cultural tourism experience, and operates two major businesses: resort property development and cultural tourism. Among them, holiday properties are houses or apartments that can be sold.
In the long run, it is necessary to diversify revenue sources by engaging in cultural tourism business in cultural tourism resorts, and at the same time attract visitors to nearby resort properties to create traffic for cultural tourism business to achieve “synergies”.
However, in a short period of time, the Greater Bay Area Cultural Tourism is still a real estate development company in the form of cultural tourism from the outside world, and it has the same common problems as ordinary real estate companies.
According to the prospectus, as of August 31, 2021, it has a portfolio of 18 resort property development projects, including Overseas Chinese Mansion, Yuehu Bay, Yuequan Bay, Yushan Lake, Yue Mansion, Yulong Bay, Shanhu Mansion, Yuxi Bay Eleven projects have been completed, three projects are under development, and four projects are held for future development. The total construction area of the land bank is approximately 1.3 million square meters.
In contrast, the only cultural tourism destinations are Qingyuan Yingde Chocolate Kingdom, Zhongshan Spring Forest Happy World Park and Jiangmen Enping Spring Forest Golden Town. But these tourism projects also contain a large number of residential properties that can be sold.
Some of them are sold by the Greater Bay Area Cultural Tourism under the name of holiday properties. For example, the 11 completed holiday property projects mentioned above are all located in the Quanlin Golden Town of Enping.
For the other part, China Aoyuan Group, a shareholder of Cultural Tourism in the Greater Bay Area, directly launched the market in the name of residences and apartments. For example, in the Qingyuan Yingde Chocolate Kingdom project, many bungalows and villas have been developed, which are consolidated by China Aoyuan.
From the perspective of financial data, in the three years from 2018 to 2020, the Greater Bay Area cultural tourism achieved operating income of about 335 million yuan, 736 million yuan, and 968 million yuan, of which the sales revenue of resort properties recorded 267 million yuan, 594 million yuan and 8.48 million yuan. Billion yuan, with contributions accounting for 79.8%, 80.7%, and 87.7%, showing an upward trend year by year.
According to the latest data, as of May 31, 2021, cultural tourism in the Greater Bay Area has revenue of 319 million yuan, and holiday property sales revenue of 278 million yuan, accounting for 87.1%.
Correspondingly, in recent years, the decline in profit from property sales of real estate companies has become a common problem in the industry. Reflected in the cultural tourism of the Greater Bay Area, its overall gross profit margin in the first five months of 2018-2021 has shown a downward trend, from 44.8%, 43.3%, and 37.9% to 27.2%. Specifically, the gross profit margin for the sale of holiday properties dropped from 47.3% in 2018 to the latest 26.7%.
Whether it is a cultural tourism company or a real estate developer, the outside world‘s judgment on cultural tourism in the Greater Bay Area may already be self-evident. Under the current pressure, the capital market is also unable to support the previously popular property management stocks, and is less optimistic about other real estate concepts in a short period of time.
The Greater Bay Area Cultural Tourism is an enterprise of the “Aoyuan Department”. Up to now, China Aoyuan holds 28% of the shares of Greater Bay Area Cultural Tourism through its wholly-owned subsidiary, Yuejing, and is the second largest shareholder and the single largest shareholder.
At the same time, Ruan Yongxi has recently succeeded Lin Jintang as the chairman of the board of directors of the Greater Bay Area Cultural Tourism. The former is currently serving as Assistant to the President and Director of the Group’s Strategic Investment Center within China Aoyuan Group.
In addition, China Aoyuan is also one of the major customers and suppliers of cultural tourism in the Greater Bay Area. From 2018 to May 31, 2020, the income of Greater Bay Area Cultural Tourism from China Aoyuan accounted for 4.5%, 5.6%, 0.5% and 1.4% of the total income.
In the fourth submission, the Greater Bay Area Cultural Tourism has hit the Hong Kong Stock Exchange for the fourth time. Such resilience is not common among listed companies in the past. But in the end, there are too many unknowns.
