3 kinds of firms partner with Shanghai Disney Resort

After six-year preparation and construction, Shanghai Disney Resort is scheduled to be inaugurated on June 16, allowing tourists from home and abroad to have a wonderful tour in Shanghai.

3 kinds of firms partner with Shanghai Disney Resort

SSN finds that since the Shanghai Disney Resort project started in 2011, there were three kinds of partners cooperating with the resort, including the companies establishing strategic cooperation relationship with the resort, lessees in the Disney town and partners in tourism field.

The Shanghai Disney Resort has achieved strategic cooperation with 12 companies since 2013, including Industrial and Commercial Bank of China Limited (ICBC, 01398.HK; 601398.SH), Pepsi CO., Inc., Tingyi (Cayman Islands) Holding Corp. (00322.HK), SAIC General Motors Corporation Limited, China Mengniu Dairy Company Limited, Dicai (Shanghai) Investment Management Consultant Co., Ltd., China Pacific Insurance (Group) Co., Ltd. (02601.HK; 601601.SH), Invengo Information Technology Co., Ltd. (002161.SZ), Pandora Jewelry (Shanghai) Co., Ltd., China Eastern Airlines Corporation Limited (600115.SH), China UnionPay and Liby Group Co., Ltd. These 12 companies offer services to tourists in the Shanghai Disney Resort in terms of finance, communication, entertainment, catering, consumption and other aspects.

Lessees in the Disney town are also commercial partners of the resort. Although in a small group, they will provide visitors with diversified shopping choices and various quality restaurants. It is learnt that there are nearly 50 lessees in the town, including Hot Toys, which hits China market for the first time, Golden Teddy Bear Workshop and the brand-new concept restaurant by a famous chef Wolfgang Puck, etc.

Compared with the above partners, the tourism partners are the ones which first bring the miracle of Disney to tourists from all over the country. The Shanghai Disney Resort came to agreements on cooperation with more than 30 online and offline travel agencies in China, such as Anhui China Youth Travel Service Co., Ltd., Shanghai Jinjiang International Travel Co., Ltd., China International Travel Service Limited, Head Office and China CYTS Tours Holding Co., Ltd. (600138.SH).

Firms obtain franchise rights from Walt Disney

Disney aims to develop an engine to boost China’s demand for a great number of Disney products, including toys, apparel, interior furnishing, movie downloading and computer games. Brand authorization of Mickey Mouse and other cartoon images is an important form and has become an important source of profit of Walt Disney. This is also another kind of channel for Disney to have commercial partners in China.

According to incomplete statistics, Walt Disney now has more than 3,000 authorized dealers which sell over 100,000 kinds of products related to Disney cartoon images all over the world. And it owns more than 100 authorized dealers in mainland China, many of which are listed companies in A-share market.

Hailun Piano Co., Ltd. (300329.SZ) is a listed company recently authorized by the Walt Disney brand. It announced on May 23 that it had signed license agreement with The Walt Disney (China) Company, according to which Disney permits the company to use prototype and trademark of Disney in designated instrument and relevant accessories in definite term and authorizes it to sell licensed products through specific channels.

Listed company Shanghai Dragon Corporation (600630.SH) also gains franchise rights from Disney. Its subsidiary Shanghai Threegun Group is the general agency of Disney textile in China, which has the exclusive right to produce and sell children underwear of four Disney brands in China and is one of providers of consumer goods in Shanghai Disneyland.

Shanghai Everjoy Health Group Co., Ltd. (002162.SZ), engaged in building materials, was authorized by the Walt Disney (Shanghai) Limited in 2014 to use the prototype and trademark of Disney brand in its ceramic tile products. Zhejiang Haers Vacuum Containers Co., Ltd. (002165.SZ), involved in light manufacturing, was allowed by Disney in 2015 to use relevant Disney prototype and trademark on some household articles in certain time limit.

Besides the strategic cooperation developed with Shanghai Disney Resort, China Eastern Airlines also entered into Memorandum of Understanding (MOU) with Walt Disney in early 2014. The MOU covers developing comprehensive tourism products, jointly launching marketing activities, and distributing air tickets and entrance tickets through their own channels.

Palm Eco-town Development Co., Ltd. (002431.SZ) won the bidding of nursery-grown plants for Shanghai Disney projects for multiple times ever since 2013, totaling a contract amount of 120 million yuan. The company also won the bidding of a landscape engineering project in the Disney Resort which totaled 30 million yuan. Beijing Shiji Information Technology Co., Ltd. (002153.SZ) provides Shanghai Disney with a complete information system solution with hotel, restaurant, retailing and customized software integration service included.

“Disney boom” boosts relevant companies

The Shanghai Disney Resort will officially open to the public in less than 20 days, but the enthusiasm has started to heat up. Latest data from www.lvmama.com shows that the reservation of Disney tourism products now peaks and the entrance tickets during the opening ceremony see a tight supply. According to reservation data, 46 percent of tourists from provinces and cities outside Shanghai have purchased the tickets of at least one other resort in Shanghai or surrounding areas. As the resort will open soon, the data will keep climbing. The driving effect of Shanghai Disney Resort on the tourism industry within Shanghai and surrounding areas comes into play.

Big data from www.lvmama.com forecasts that the number of tourists visiting resorts surrounding Shanghai will grow by 40 percent during June 16-30. The top 5 destinations favored by Disney tourists are Shanghai Wild Animal Park, Oriental Pearl, Shanghai Chang Feng Ocean World, Shanghai World Financial Center and the Huangpu River.

To the business partners of Shanghai Disney, a grand banquet is going to be served soon. Research report by Golden Sun Securities forecasts that Shanghai Disney Resort will receive 12 million person-times in 2016 and its annual reception capacity will total around 24 million person-times later. Calculated on the basis that the cost on entrance ticket averages to 350 yuan per tourist, the entertainment consumption in the resort averages to 300 yuan per tourist and other consumption like traffic, accommodation, tourism and shopping averages to 600 yuan per tourist, a direct economic profit of 15.6 billion yuan will be earned by the resort with another 14.4 billion yuan brought to other industries.

It means a considerable income for Shanghai Shendi (Group) Co., Ltd., a shareholder of Shanghai Disney.

The top four shareholders of Shanghai Shendi are leading enterprises engaged in culture, commerce, tourism and real estate in Shanghai. Seven relevant companies listed on the A-share market are Shanghai Lujiazui Finance & Trade Zone Development Co., Ltd. (600663.SH), Shanghai Jinjiang International Hotels Development Co., Ltd. (600754.SH), Shanghai Jin Jiang International Industrial Investment Co., Ltd. (600650.SH), Shanghai Oriental Pearl Media Co., Ltd. (600637.SH), Shanghai Bailian Group Co., Ltd. (600827.SH), Shanghai No.1 Pharmacy Co., Ltd. (600833.SH) and Shanghai Material Trading Co., Ltd. (600822.SH). Research report by Golden Sun Securities believes that relevant listed companies are in favorable positions to participate in the development of the Disney Resort project and relevant business.

Chen Hui, an analyst with Everbright Securities, believes that multiple kinds of front-end supporting equipment for Disney also expect great development potential. For instance, the front-end supporting equipment provided by listed companies like Shanghai Potevio Co., Ltd. (600680.SH), Palm Eco-town Development, Shenzhen Jieshun Science and Technology Industry Co., Ltd. (002609.SZ) and Shanghai Canature Environmental Products Co., Ltd. (300272.SZ) fully blend into the Disney resort after adaptive improvement, and help the resort to make tourists’ experience there more wonderful. Since periodical update is required by some equipment, maintaining long-term cooperation with Shanghai Disney means stable income for some listed companies.

(APD/XH FINANCE)