Sim Leisure Group (SGX: URR) specialises in developing, operating, and managing themed attractions, both as an IP owner and under franchise agreements. Its main revenue segments include 1) Theme Park Operations; and 2) Design and Theming Construction.
Under its Theme Park Operations business, Sim Leisure Group operates various theme parks, including the ESCAPE Parks and ESCAPE Challenge brands in Malaysia. The group also acquired KidZania Singapore and KidZania Malaysia to revitalise the brands. Most recently, it franchised Haven XR, which delivers a virtual reality (VR) experience, intending to roll the brand out across Southeast Asia.
The group also has over 30 years of experience in its Design and Theming Construction business. It focuses on master planning, designing concepts, fabrication and construction, and providing theme park services such as online ticketing systems and safety management for parks and attractions.
Here are 5 things you should know about Sim Leisure Group’s project portfolio spanning Family Entertainment Centres, Theme Parks, Waterparks, Zoos and Aquariums.
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#1 How Does Sim Leisure Differentiate Itself From Other Theme Park Players?
We don’t see ourselves as typical “theme parks,” although we’re often categorised that way. The term has been used by movie franchises to keep their superheroes and characters relevant, a concept dating back to the 1930s as a form of escapism. Despite its success, this model has not evolved much over almost a century.
We are different because we are dedicated to the innovation of rides, to provide what we think matters most, i.e. providing unique novel experiences especially for the younger generation rather than copying and repeating roller coasters, named after movie characters.
We see the future of family fun in three main areas:
i) Re-introducing outdoor play in nature. We emphasise fun and adventure in natural environments, encouraging a reconnection with nature.
ii) Amplifying experiences using VR technology: We leverage virtual reality (VR) to enhance and transform the entertainment experience.
iii) Bringing outdoor parks indoors, especially in Asia with the oversupply of malls, indoor attractions have become a viable and exciting option.
The COVID-19 pandemi boosted trends like reconnecting with nature. Moreover, technological progress during this time has increased interest in VR entertainment.
Recently, we launched two new major parks: 1) the adventure-based 120-acre ESCAPE Ipoh Park; and 2) the children role-play educational entertainment city of KidZania at Sentosa Singapore. These new parks are expected to enhance our top-line growth further, increasing our portfolio to five operating theme parks comprising two KidZania City facilities (in Kuala Lumpur Malaysia and Sentosa Singapore), two outdoor adventure parks under the ESCAPE brand (in Ipoh and Penang Malaysia), and one indoor ESCAPE challenge park (in Selangor Malaysia).
#2 Could You Share More On Sim Leisure’s Recent Financial Performance?
The Group’s revenue is broken down into two main business segments:
Theme Park Operations in Malaysia and Singapore accounts for approximately 45% of the Group’s annual revenue of RM135.5 million for the financial year ended 31 December 2023 (FY2023).
It remains the core business, contributing over 60% of the Group’s profit after taxation of RM29.1 million for FY2023.
Design and Theming Construction segment operates primarily in the Gulf Cooperation Council (GCC) region and contributed approximately 55% of the Group’s annual revenue in FY2023. It is managed through a 60%-owned subsidiary company.
Group revenue for 1H 2024 was RM86.8 million, up 56.2% year-on-year from RM55.6 million in 1H 2023. This was mainly driven by the Design and Theming Construction segment, which generated revenues of RM54.8 million from subcontracted theming works for the Six Flags Qiddiya project, as well as theming, design and refurbishment work for new and existing attractions in the UAE.
Overall, Sim Leisure Group continues to leverage its international design and theming expertise in theme park operations to drive its continued success and expansion in the leisure industry.
#3 Does The Group Have Any Expansion Or Acquisition Plans And What Are The Strategies For It?
We exercise caution when acquiring assets and businesses, and we believe in the efficient allocation of capital through organic growth via a revenue-sharing model with land or asset owners for all our leisure brands.
Our recently developed indoor ‘PLAY MALL’ entertainment hub concept offers an exciting mix of nine leading attraction brands including ESCAPE Challenge Adventure Park, FUNDAY Adventure Playground, the HAVEN XR Centre, SIM COASTER Ride, CARNIVAL funfair rides and skill games, MINI MINER mining experience, the DIGGER BUILDER construction play space, NAKED EYE motion simulator ride, and SNOW VILLAGE winter wonder playland, all within one location.
We are currently working on our exciting 75-acre adventure park ESCAPE @KL Base, situated in the heart of Kuala Lumpur city in Malaysia for a phase 1 launch in 2Q2025. This launch will offer various adventure games and activities, with a chairlift facility. We are also targeting further expansions of our indoor ESCAPE Challenge Adventure Parks in Putrajaya and Johor Bahru.
Barring any unforeseen circumstances, the Group is confident we can expand our park operations portfolio to a chain of eight parks/attractions, which will offer a wide range of games and activities and filled with unique experiences under the ESCAPE and KidZania brands by 2H2025.
#4 How Have Disruptive Technologies Like Artificial Intelligence (AI) And Machine Learning Changed The Way The Group Carries Out Its Business?
Our business success relies on the genre of fun we innovated, which is beyond AI’s capabilities. AI can enhance designs and software but can never replace the physical aspects of creating physical parks.
However, AI will greatly reduce our dependence on humans in business administration, and enhance different business functions like marketing and sales, hence lowering the operational cost and complications of human labour.
We are diversifying our operational risks by investing in VR attractions which can be done at home (albeit with limitations).
Climate change may also adversely affect the ESCAPE brand of outdoor attractions, but we hedged our climate risk by investing in indoor attractions and VR.
#5 Why Should Investors Take A Closer Look At Sim Leisure?
The theme park and attraction industry is unique in its stagnation over the past century, largely due to dominant players originating from real estate, gaming, or government-owned entities, rather than being dedicated to the theme park sector itself. This contributes to the overall lacklustre competitive environment.
We distinguish ourselves as one of the few globally pure-play theme park operators. We continue to be forward-looking and capitalise on trends our competitors have missed. Most of our competitors adopt Western business models in the regions we operate, which have consistently proven ineffective.
Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 24 September 2024 and republished with permission. You can read more about Sim Leisure Group (SGX: URR) on the SGX website.
Read other featured companies from SGX’s 10 in 10 series on the DollarsAndSense website.
The post 5 Things To Know About Sim Leisure Group (SGX: URR) – The Franchisee Of KidZania In Singapore And Malaysia, And Other Theme Parks appeared first on DollarsAndSense.sg.
