Haichang Ocean Park Holdings Ltd (2255.HK) reported a widening net loss and falling revenue for the first half of FY26, as its debt burden intensified.

The marine theme park operator logged a net loss of 332 million yuan for the six months ended June 30, 2026, up 12.7% from 295 million yuan in the prior-year period. Revenue declined 22% year-over-year to 536 million yuan ($80 million).

Financial Performance

Core operations across ticketing, food, and merchandise all contracted during the period. Ticket sales fell 17% year-over-year to 265 million yuan. Food and beverage sales retreated 12.3% to 60.11 million yuan, while merchandise sales plunged 50% to 39.58 million yuan.

Despite the revenue decline, selling and marketing expenses surged 47% year-over-year to 75.35 million yuan. This cost inflation contributed to a sharp compression in profitability metrics. The gross profit margin shrank by 5.4 percentage points to just 5%, down from 10.4% in the prior-year period.

Balance Sheet Pressure

The company’s leverage position deteriorated significantly over the six-month period. The net gearing ratio jumped to 209.9% by end-June, up from 171% at the end of December 2025. Short- and long-term interest-bearing borrowings totaled 5.45 billion yuan midway through the fiscal year.

Liquidity constraints became more acute as cash and cash equivalents dwindled to 460 million yuan, down by more than half from 1.06 billion yuan at the end of last year. While interest-bearing debt due for repayment this year fell 25% from six months earlier, it remains elevated at 1.28 billion yuan.

Operational distress was further evidenced by frozen bank accounts totaling 24.13 million yuan due to missed supplier payments. The company made full provisions for this amount. Capital expenditures remained high at 330 million yuan, nearly matching the total capital commitments for all of last year.

What the Numbers Show

The divergence between top-line contraction and expense growth highlights structural inefficiencies in the current operating model. While revenue fell 22%, marketing spend rose 47%, suggesting that customer acquisition costs are rising sharply even as footfall declines. This dynamic eroded the gross margin by half, indicating that the cost structure is not scaling down proportionally with reduced sales volume.

Ownership Changes

Amid financial strain, Haichang saw significant shifts in its shareholder base. In July, Mei Zhiming acquired a 21.75% stake, becoming the second-largest shareholder. He purchased 1.2 billion shares from Qu Cheng (Qu Naijie’s son) for HK$360 million and 1.68 billion shares from Sunriver Holding for HK$754 million.

Sunriver retains a controlling 25.92% stake, while Qu Cheng’s holding dropped to 19.13%. Mei Zhiming, a co-founder of GLP, brings experience in restructuring complex assets, having previously worked on Li & Fung Ltd and Bicester Village Suzhou.