Chinese theme park operator Haichang Holdings aims to raise up to $346 million in a Hong Kong initial public offering in March. It will be the first Asian theme park operator to list.
The global roadshow starts Friday, with bankers travelling across Asia, Europe and the US to meet with potential institutional and retail investors.
Haichang, China’s version of Sea World, is seeking $281 million to $346 million, with one billion shares on offer priced between HK$2.18 and HK$2.68. If the greenshoe option is exercised, the amount raised could hit $397 million.
Shares will price on March 8 with the listing due on March 13.
The company has secured two cornerstone investors ahead of the roadshow – Central Asset Investments Management and Kaisa Group Holdings, a Hong Kong property developer, have each pledged $20 million and $10 million, respectively.
Haichang will use 50% of the proceeds, or $147.8 million, towards developing the Haichang Polar Ocean World in Shanghai, while another 40%, or $118.3 million, will be used to help build the Sanya Haitang Bay Dream World. The remaining 10% will be employed as working capital and for other general corporate purposes, according to a company prospectus.
Should the development of these two new theme parks not proceed as planned – due to a failure to obtain land-use permits, changes in government policy or a force majeure – the company’s directors may use the capital to expand existing theme parks or develop other parks.
At the moment, Haichang has theme parks in Dalian, Qingdao, Tianjin, Yantai, Wuhan and Chengdu. The company also plans to acquire Dalian Discoveryland and Chongqing Caribbean Water Park by year-end.
As of December, Haichang had over 500 marine and polar animals across 30 species, and more than 40,000 types of fish, coral and jellyfish. It has 500 large-size sharks – including whale sharks, sand tiger sharks and hammerhead sharks – more than 170 penguins, 90 seals, 120 sea lions, 60 dolphins, 30 beluga whales, eight false killer whales, 21 walruses and 13 polar bears.
The company was the largest marine park operator in China, with 7.2 million visitors in 2012, more than twice the number of visitors hosted by its closest competitor.
Shares in US-listed SeaWorld, which many say is the most comparable company to Haichang, is up 17% year-to-date. Other listed theme parks include Merlin London, Lego Land, and two Australian parks, Ardent Leisure and Village Roadshow.
Haichang's IPO will likely resonate well with investors, with a banker telling FinanceAsia he anticipated strong demand from mainland institutions and the retail community in particular.
Chinese tourism
Chinese are increasingly travelling around their country. According to the National Bureau of Statistics of China, some 2.9 billion Chinese travelled domestically in 2012, spending Rmb2.3 billion ($35.3 million). This compares with just 1.7 billion tourists spending Rmb874.0 million in 2008, statistics show.
This increased travel is a direct result of rising affluence – the per capita disposable income of urban Chinese households increased by 9.6% to Rmb24,565 in 2012 from Rmb21,810 in 2011.
In theory, this should push up traffic to Chinese theme parks. Some 103 million visitors went to theme parks in 2011 and 109 million in 2012. And, according to the National Bureau of Statistics of China forecasts, these numbers should steadily increase over the next few years, hitting 115.9 million in 2013, 123.4 million in 2014, and 132 million in 2015.
The fact it’s the first Asian theme park to list will also garner plenty of attention, the banker said. “It’s got the unique factor that’s for sure,” he told FinanceAsia late Thursday. “It’s the largest marine park operator in China and the second largest park operator in China. The theme here is domestic tourism.”
Bank of America Merrill Lynch and BNP Paribas are acting as joint bookrunners and lead managers, with CCB International, China Merchant Securities, Essence International and ICBC serving as passive bookrunners.
