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underperforming, orHaichang Ocean ParkReasons for exclusion from MSCI.
Viewpoint.com Dolphin roller coaster is a key project of Haichang Ocean Park. Spinning and diving bring a surge of adrenaline and excitement to tourists, and the stock price of Haichang Ocean Park often “rides the roller coaster”.
On February 10, MSCI released the results of the quarterly audit changes. The MSCI China Index newly included 7 constituent stocks and eliminated 8 constituent stocks. Haichang Ocean Park is on the exclusion list.
Within three months, Haichang Ocean Park went from being included to being eliminated. Coincidentally, the stock price plummeted in response to the inclusion and exclusion of Haichang Ocean Park in the capital market.
Dating back to November 11, 2022, MSCI announced the results of the semi-annual audit changes, Haichang Ocean Park was transferred in, and the day after the effective date (November 30), the stock price of Haichang Ocean Park once fell by 75% .
According to Guandian New Media, on December 1, 2022, Haichang’s stock price opened at HK$3.23/share, and then fell rapidly. As of 11 o’clock, it had fallen to HK$0.81/share. shares, closing at HK$1.49 per share, a drop of 53.87%.
Market participants believe that because the change of MSCI has come into effect, Haichang Ocean Park will have a large amount of passive capital inflow, and become the “harvest” target of Zhuanggu.
Previously, the stock price had been trading sideways for a long time, and this time it may be a good time to “change hands”.
On the same day, news spread that Haichang Ocean Park founder Qu Naijie’s son and controlling shareholder Qu Cheng planned to cash out 45% of the company’s equity.
Haichang Ocean Park immediately clarified that Qucheng has not sold any shares and is still the controlling shareholder of the company, and emphasized that there is no abnormality in the group’s business. The company’s stock price rebounded the next day, up 2.08%.
But in less than half a month, Haichang Ocean Park suffered another “storm” and was rumored to be removed from the Hong Kong Stock Connect list. This is actually an “oolong” incident.
During the Spring Festival holiday in 2023, the tourism, consumption, and movie markets will be booming again, and many sectors will strengthen after the holiday. Among them, Haichang Ocean Park rose more than 20% on February 9, and closed up 18.09% to 2.22 Hong Kong dollars per share.
The stock price of Haichang Ocean Park is like riding a roller coaster. After reaching a small peak, it is very exciting to dive immediately.
On February 10, Haichang Ocean Park opened low and moved low. It opened at HK$2.15/share and closed down 12.16% at HK$1.95/share, with a turnover of HK$208 million and a total market value of HK$15.822 billion.
The stock price drop may have been affected by the removal of Haichang Ocean Park from the MSCI China Index, which will take effect after the market closes on February 28.
Due to the adjustment of multiple MSCI index constituents, the relevant index funds will also adjust their positions accordingly. The newly included companies will receive more capital allocation, while the excluded companies will be passively sold by the relevant index funds. In order to reduce the tracking error of the index as much as possible, passive funds usually choose to adjust their positions on the last day.
From the perspective of turnover rate, the turnover rate of Haichang Ocean Park on February 10 was 1.3%, higher than the turnover rate of less than 1% on weekdays, and 18.17% higher than last year when the stock price fell sharply due to MSCI news. Compared with the hand rate, although there is no obvious sign of the main force controlling the market, the rapid increase in the turnover rate in the past two days may mean that some profit-seekers want to cash out, and the possibility of being shorted is not ruled out.
It is worth noting that MSCI selects stocks with good performance and good performance. After listed companies are included in the MSCI index, they will introduce foreign investment and expand financing channels.
Generally speaking, the reasons why companies are excluded from MSCI include: substandard performance, high debt ratio, poor market liquidity, and touching the highest limit of foreign shareholding.
The performance is not up to standard, or the reason why Haichang Ocean Park was excluded from MSCI.
Guandian New Media checked the financial report and learned that due to the repeated impact of the epidemic and the divestiture of some parks at the end of 2021, as of June 30, 2022, the Haichang Ocean Park Group’s revenue fell by 80.51% year-on-year to 258 million yuan, and the gross profit loss was 142 million yuan. The adjusted EBITDA loss and the adjusted net loss attributable to shareholders were 166 million yuan and 460 million yuan, respectively.
At present, Haichang Ocean Park has three major business segments, namely theme park operations, cultural tourism services and solutions, and property sales. Theme park operation is the core business segment of Haichang Ocean Park. From 2017 to the first half of 2022, this segment’s revenue accounted for more than 90%.
Since tasting the sweetness brought by the Ultraman IP cooperation, Haichang Ocean Park has reached many cooperations, and there are many well-known IPs such as “One Piece” and “Havoc in Heaven”.
Haichang Ocean Park also pays attention to the development of derivative cultural and creative products. The Bank of China International Research Report pointed out that in August 2022, the sales of Shanghai Ultraman Theme Pavilion will be about 10.32 million yuan, which will drive the overall per capita consumption of Shanghai projects to increase by 74% compared with 2019. Yuan to 116 yuan.
With the optimization of the proportion of secondary consumption in the project, it will bring continuous contribution to Haichang Ocean Park. At the same time, the asset-light transformation of Haichang Ocean Park can be accelerated by authorizing the holding of IP.
Haichang Ocean Park used to adopt an asset-heavy strategy for expansion, and the opening of new projects was accompanied by an increase in bank loans.
After divesting some projects in 2021, the asset-liability ratio of Haichang Ocean Park has been significantly optimized, dropping to 67.31%, which will reduce cash flow pressure and financial risks.
The adjustment of epidemic prevention and control provides a basis for the improvement of tourism fundamentals, which will improve the cash flow performance of cultural tourism companies. Being removed from MSCI, or an episode on Wenlv Road in Haichang Ocean Park.
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