Final Report - Asian Development Bank

TA 4721-PRC: Preparing the Shaanxi-Qinling Mountains Integrated Ecosystem Management Project
Final Report Appendix 13
71. Additional revenues are generated from the eco-restaurant and from parking. Eco-restaurant
revenues are generated from over-night visitors to the villas and hotel (constructed in phase one) and
from day visitors for bathing (50% of visitors at CNY30 per day visitor) and sightseeing (20% of visitors
at CNY20 per head). The cost of sales ratios employed by the Hot Springs Design team for lodging,
the restaurant and parking are for the most part very consistent with the ratios identified in the
independent research by the PPTA Team.. The HS Design Team analysis assumed the same
revenues and costs for every year of operation.
Table 19: Assumptions used for Revenue Projections
Item
Hot Spring Residential
Unit
Price
(CNY)
Capacity Occupancy
Rate Daily
Villa-A 5800 8 70% 5
Villa-B 4800 6 70% 4
Villa-C 3800 4 70% 3
Catering
Tourist guest 20 2000 20% 400
Bathing guest 30 600 50% 300
Parking
Car 5 200 50% 100
Bus 10 100 50% 50
Daily
guests
72. As the investment is building on the existing development the capital construction and
investment is expected to be complete within a construction period of one year and that the occupancy
and therefore revenue forecasts be achieved one year following. Based on these projections the total
revenue per year is approximately CNY 30 million (USD 4 million). The investment costs for the
proposal are estimated at CNY 65 million – see Table 20. The mix of costs differs from the other two
enterprises with far greater investment into the equipment budget line to outfit the villas, pool and
restaurant.
Table 20: Hot Springs Investment Costs (CNY ‘0,000’s)
Item 2008 2009 2010 2011 2012
A: Financial Costs
Fixed Asset 5524.2 0.0 0.0 0.0
Civil Works 3200.3
Equipments 2323.9
Intangible Asset 927.3
Total investment 6451.5
B: Economic Costs
Total investment 5299
73. The financial forecasts are presented in Table 21 which highlights the strong cash-flow
forecast which results in a FIRR before tax of 13.7% and after tax of 10.9% both above the WACC
however the after tax operation is lower than the commercial hurdle of 12%. The enterprise has
accepted this rate of return however that will require the construction timetable to be fully met.
Table 21: Hot Springs Financial Cash Flow Forecast
Item 2008 2009 2010 2011 2012 2013 2014 2015
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