Haichang boss optimistic despite arrival of Disneyland
A pioneer of Haichang's expansion push, Wang Xuguang explains why Disneyland will create business synergies, not competition, for his firm's marine theme park in Shanghai
After spending nearly two decades working in Industrial and Commercial Bank of China's Dalian branch and climbing to the No 2 position, Wang Xuguang decided it was time for a change at the age of 37. In 2007, he left the financial industry and joined Haichang Holdings chairman Qu Naijie to develop the theme park business nationwide.
In the past few years, Wang steered Haichang's aggressive expansion, as it now operates eight theme parks focusing on marine and polar animals in Dalian, Qingdao, Wuhan, Tianjin, Yantai and Chengdu. The firm is now the largest marine theme park operator in China by visitor numbers and water volume.
While planning to strengthen its existing business, Wang hopes Disneyland in Shanghai, which is set to open next year, will bring positive impact to the Shanghai Haichang Polar Ocean World, which will open in 2017.
With the existing business scale, what is the firm's future plan?
It is how to strengthen the revenues of Haichang's existing theme parks. We are developing a theme park in Shanghai, the Shanghai Haichang Polar Ocean World, which will be the largest [in China] when completed in 2017, and another in Sanya, Hainan.
Apart from theme parks, we will look at opportunities in ancillary businesses such as building small-scale marine parks in shopping centres. The margin of these businesses is high but investment cost is low.
Theme parks have a chequered history [in China]. Many of them have failed over the past decades. What makes Haichang different?
Haichang positions itself as a marine-related theme park developer and operator. There are about 60 marine theme parks in the country. Among them, there are about 20 scaled parks. Seven of them are ours. We are the second-largest marine theme park operator in the world with more than 47,000 ocean animals.
With a growing population and the increased consumption of the general public, the outlook is positive.
How long will it take your theme park to make a profit [from the start of construction]?
The average is six to nine years.
Haichang's Shanghai theme park and Disneyland are separated only by a 20 to 30-minute drive. Why do you say it will create business synergies, but not competition, for the Shanghai Haichang Polar Ocean World?
If we are running the same kind of businesses, that will result in competition. But our theme parks are different. That will bring about a linkage effect. Tourists are usually eager to travel to more places within a limited amount of time. Disneyland will draw more clients, who will also visit our park. But we have to sustain a high quality as clients will compare it with Disneyland.
How does [China's] slower economic growth affect your company's business?
The country has experienced rapid growth in the past 30 years. Now everyone has to learn to adjust to slower growth. Nowadays, people focus more on family entertainment than luxury consumption. Our ticket prices average 115 yuan each, which is affordable for the general public.
Who are your customers? How do you attract them to your parks?
The post-'80s and post-'90s generation together account for 87 per cent of our customers. To cater to their consumption patterns, we have linked our businesses with technology such as providing Wi-fi services at our theme parks and co-operating with e-commerce platforms.
Shares in Haichang have lost 51 per cent since listing in March last year. What are the reasons?
Investors do not understand the industry. Liquidity in the Hong Kong stock market is relatively small and most of the trading goes into blue chips.
In mainland [China], there are analysts who cover particularly the theme park industry and the A shares of theme park operators have average price-earnings ratios of more than 40 times, but we are only 15 times.
Will you consider an A-share listing [in China]?
Everything is possible. We could also consider spinning off our ancillary businesses for an A-share listing when the opportunities come.
What made you leave ICBC's Dalian branch and join a private enterprise?
At the time, I felt I did not like the occupation of working in a bank. I felt career development opportunities there were limited. When I decided to leave the bank, many of my friends asked me why. Now they say I have vision.