Yuyuan Commercial City(19.27,0.550,2.94%)(600655) announced on the evening of November 10 that the company plans to acquire 100% equity of Hoshino Resort Tomamu Co., Ltd. in Japan for 18.358 billion yen (approximately 947 million yuan based on the exchange rate on November 9, 2015).
The main asset of Hoshino Resort Tomamu Co., Ltd. is a ski resort located in Tomamu, Hokkaido. The resort includes 757 hotel rooms (with an additional 710 unused rooms), a 25-slope ski area (with the longest slope being 4,200 meters), an 18-hole golf course, and other facilities. Currently, 100% equity of Hoshino Resort Tomamu Co., Ltd. is held by Dutch fund Matakite B.V. (80% stake) and Hoshino Resort Co., Ltd. (20% stake).
The announcement stated that since its establishment in 2004, Hoshino Resort Tomamu Co., Ltd. has taken multiple measures to expand its customer base and improve operational efficiency, leading to steady performance improvement. Especially after 2012, the company seized the opportunity of rising tourism visibility in Hokkaido, increased investment, successively expanded facilities such as the Cloud Sea Deck, and renovated existing hotels, resulting in rapid growth in occupancy rates and room rates. Over the past five years, the company’s revenue has grown at a compound annual growth rate of 10%, and EBITDA has grown at a compound annual growth rate of 43%. In 2014, the annual revenue was 6.137 billion yen, with a net profit of 701 million yen.
The company stated that the target project meets Yuyuan Commercial City’s requirements for investment returns, with the target enterprise having positive and improving net cash flow. The target project and Yuyuan Commercial City both belong to the tourism real estate sector, relying on their own properties to vigorously develop the happy fashion segment. In addition to hotels, the target enterprise’s resort has achieved a certain scale of income from dining, skiing, outdoor sports, sightseeing, and other areas, with all segments developing synergistically. This aligns highly with Yuyuan Commercial City’s strategy of integrating commerce, travel, and culture within the happy fashion framework.