Two French ski companies announced deals on Thursday with Chinese firms to help to develop ski resorts in China, where winter sports are becoming popular ahead of the 2022 Winter Olympics in Beijing.
Ski-resort equipment maker Montagne et Neige Developpement (MND Group) (MNDG.PA) agreed a joint venture deal with state-owned China Coal Zhangjiakou Coal Mining Machinery ("CCZMM") to make equipment for the Chinese and Asian markets.
The joint venture, MND Zhangjiakou Mountain Development, has a 110 million euro ($117.03 million) contract to design equipment for the Snowland ski resort north-west of Beijing. The partnership also has a contract from the Wanlong resort near Beijing. Shares in MND Group rose by over 90 percent.
Compagnie des Alpes (CDAF.PA) (CDA) has expanded its partnership with China's Thaiwoo Ski Resort, under which the French leisure company's staff will help to run the operation on an almost permanent basis.
"They (Chinese companies) want to benefit from the know-how which doesn't exist in China. They don't know the holiday industry very well. So they want to learn what hobbies you can offer the clients, how you manage resorts," Societe Generale analyst Marie-Line Fort said.
CDA estimated China has between five and six million skiers. This is expected to grow rapidly ahead of the 2022 Winter Olympics, providing an opportunity for European ski operators looking to expand.
"It's a new source of growth because the market’s pretty mature in Europe. China doesn't have expertise in the field. So that's a way for them to leverage their know-how in other countries which are really big markets," Fort said.
Chinese groups also have investments in French tourism operators.
Club Med, which was acquired by Chinese conglomerate Fosun (0656.HK) in 2015, has two ski resorts in China. CDA has also been in discussions regarding the sale of a stake to Fosun.
Pierre et Vacances (PVAC.PA) has formed a joint venture with HNA Tourism Group to launch its Center Parcs brand in China. HNA Tourism picked up a 10 percent stake in Pierre et Vacances in November 2015.
(Reporting by Alan Charlish. Editing by Jane Merriman)