As Thrill-seeking Fans Continue to Escape to Theme Parks, This Little-Known NASDAQ Company is Aiming to Conquer One of the Biggest Markets in the World!
Chinese Amusement Park Operator Golden Heaven Group Holdings (NASDAQ: GDHG) Has a Strategic Roadmap to Becoming a Renowned Name in Theme Parks All While Creating Shareholder Value Along the Way!
The company is catering to the rising demand in China’s tourism and entertainment industry. As GDHG continues to build brand recognition, 2024 could be a transformative year for the company!
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The Opportunity
With an expanding middle class, a rise in disposable income levels, and a strong demand for themed entertainment, China remains the fastest-growing attractions market in the world.
Driven by strong consumer enthusiasm, the country’s theme park industry has transformed considerably over the past few decades.
China is now the second-largest market for theme parks globally, and even during the challenges of the pandemic the country’s attraction industry continued to grow and hold its global position.
A report, China’s theme parks face a new era, highlights several trends that are shaping the industry, and identifies opportunities for both greenfield developments and existing destinations to provide new product offerings that enhance the visitor experience.
The market size of the Amusement Parks industry in China has grown 3.4% per year on average between 2018 and 2023.
The market has enormous potential says McKinsey analysis, which suggests that only 27 percent of China’s population has ever visited a theme park, less than half the average for developed markets, at 68 percent.
While many of China’s mega parks are operated by major chains in first-tier cities, including Fantawild, Overseas Chinese Town Enterprises (OCT), Songcheng, and Sunac, there is a need for entertainment tourism in lower-tier cities.
These lower-tier cities have tremendous populations and offer Golden Heaven Group Holdings Ltd. (NASDAQ: GDHG) an opportunity to capitalize as China’s theme park market thrives!
Who is GDHG?
Golden Heaven Group Holdings Ltd. (NASDAQ: GDHG) manages and operates six properties consisting of amusement parks, water parks, and complementary recreational facilities.
With approximately 426,560 square meters of land in aggregate, these parks are located in geographically diverse markets across the south of China and collectively offer approximately 139 rides and attractions.
Due to the geographical locations of the parks and the ease of travel, the parks are easily accessible to an aggregate population of approximately 21 million people, representing a tremendous and underserved market!
The parks provide a wide range of exciting and entertaining experiences, including thrilling rides, family-friendly attractions, water attractions, gourmet festivals, circus performances, and high-tech facilities.
Three strategic initiatives are being implemented to accelerate GDHG’s business expansion and bolster its presence in the market:
- Collaborate with top players in the Chinese amusement park industry and extend the Company's reach in the market.
- Increase the Company's brand recognition, by learning from the successes of renowned global theme parks, such as creating exclusive IPs and promoting themed events.
- Contemplating the elevation of guest experiences of the Company's service offerings by offering additional services, such as dining options and hotel lodging services in the parks.
"Our growth strategy is anchored in strategic partnerships. While major amusement parks in China are concentrated in larger cities, we see great potential in focusing on lower-tier cities. This unique focus allows us to leverage our strengths in potential collaboration with major amusement parks in larger cities, creating a synergistic effect for broader market impact. We are proactively pursuing opportunities for such collaboration, which we hope to update to our shareholders soon. We are also dedicated to enhancing our management and diversifying our offerings to ensure our guests have delightful experiences. We are confident that these strategic initiatives will not only increase our profitability but also boost our brand visibility, creating sustainable value for our shareholders."
- CEO and Chairman Ms. Qiong Jin
Theme Parks: A Lucrative Business
Savvy investors are riding the roller coaster on Wall Street, paying close attention to theme park-related companies. Many of these companies including Walt Disney Company and Six Flags Entertainment are raking in $1B+ in dollars in yearly revenue.
Amusement parks are lucrative businesses that bring in millions of tourists from all over the world annually. While they are often overlooked by investors, amusement parks are strong consumer cyclicals.
There was a lot of love for theme parks in 2023, and all but one of the major theme park operators lost to the market last year. 2024 may be even better and investors and theme park enthusiasts alike could flock to theme parks in the coming year.
A lot happened in the closing months of 2023.
Comcast confirmed the purchase of a large tract of land in the U.K. as it explores opening its first park in Europe.
SeaWorld filed plans to build a 504-room hotel at SeaWorld Orlando, finally turning its most visited attraction into a resort destination.
Disney announced that it was nearly doubling the capital expenditures at its theme parks to a staggering $60 billion over the next 10 years.
As these leading theme park operators step up their efforts to grow, Golden Heaven Group Holdings (NASDAQ: GDHG) may be a smart choice to gain exposure to the exciting world of theme parks on Wall Street!
Reasons to Have GDHG on Your Radar
- The company aims to become the leading regional amusement park operator in China.
- The company has plans to enter into an operating lease framework agreement with a top-tier Chinese amusement group. The Group is a subsidiary of a prominent Chinese tourism group, ranking among China’s top 30 national cultural enterprises and top 20 tourism groups! This Agreement is expected to mark a significant step in GDHG’s strategic business expansion efforts, and is aimed at enhancing the company’s market position by leveraging its strong presence in the Chinese amusement park industry.
- There is an increasing demand in China’s culture and tourism industry. In 2022, the total contribution of the travel and tourism industry accounted for around 3.3% of China’s total GDP. This equated to nearly four trillion yuan or approximately 580 billion U.S. dollars.
- In 2023, the market size, measured by revenue, of the country’s amusement parks industry was $5.4bn. The market size of the industry increased 8.8% last year!
- Most of the country’s theme parks are mega parks. GDHG is focusing on lower-tier cities where it can capitalize on underserved populations.
- The company is in a strategic partnership with Fujian Xinchang Construction Engineering Co., Ltd. (FXCE) for the construction of three new amusement parks in Southern China. One recently started a trial operation!
More Company Highlights
Headquartered in Yanping District, Nanping City, Fujian Province, China, Golden Heaven Group Holdings (NASDAQ: GDHG) is a leading amusement park operator in Yanping District and an active player in developing the Chinese amusement park industry.
According to government authorities in Fujian Province, Yanping District is known as “the birthplace of Chinese amusement park industry” and entrepreneurs from Yanping District have expanded beyond Yanping District and established their presence all across China.
The company has six parks:
- Mangshi Jinsheng Amusement Park features a Ferris wheel, luxury carousel, pirate ship, and pendulum ride. (temporarily closed)
- Qujing Jinsheng Amusement Park features a Ferris wheel, carousel, pirate ship, and pendulum ride.
- Changde Jinsheng Amusement Park features a Ferris wheel, luxury carousel, pirate ship, pendulum ride, sky-high swing ride, roller coaster, and bumper cars.
- Tongling West Lake Amusement World features a double-decker carousel, roller coaster, pirate ship, pendulum ride, sky-high swing ride, water coaster, children’s park, and bumper cars.
- Yueyang Amusement World features a double-decker carousel, pirate ship, pendulum ride, sky-high swing ride, musical fountain, ice rink, bumper cars, boat rides, and the Dongting Eye Ferris wheel.
Company Growth
GDHG has seen an uptick in its visitors at its parks. Among the amusement parks in operation, Yuxi Jinsheng Amusement Park witnessed a significant increase in the number of visitors to 15,000 during the Holidays, representing an increase of approximately 50% over the same period last year. During the Holidays, the visitor traffic also rose by 25% year-on-year to 15,000 in Tongling West Lake Amusement World, while the number increased modestly by 7% year-on-year to 30,000 in Yueyang Amusement World.
In October of 2023, GDHG signed three construction contracts with FXCE for the groundwork of three new amusement parks in southern China, comprised of the Yangming Lake Glacier Tribe Amusement Park, the Seven Rainbow Park, and the Linli Jinzheng Amusement Park.
- Yangming Lake Glacier Tribe Amusement Park, located in Changde city, Hunan province, boasts an approximately 20,000 square meter property with an estimated RMB180 million investment, targeting completion by September 2024.
- Seven Rainbow Park, located in Anshun city, Guizhou province, will span approximately 15,333 square meters, backed by an estimated RMB140 million investment.
- Changde City will also welcome Linli Jinzheng Amusement Park on an approximately 30,000 square meter plot, with an estimated RMB270 million investment, set for completion by March 2025.
GDHG announced in February the trial operation of an additional park called Seven Rainbow Park in Anshun City, Guizhou Province. The construction of the Park was completed ahead of schedule and the Company commenced the trial operation of the Park in January 2024.
The company expects the park to provide a good entertainment experience for guests, especially during the winter holiday and the Chinese New Year. An estimated total of RMB140 million is expected to be invested in the park, of which amount, approximately RMB41 million has already been invested in the park to date.
The park spans approximately 15,000 square meters. It specifically caters to the entertainment needs of children and teenagers, featuring a range of attractions such as a Ferris wheel, a luxury carousel, a zoo, an ocean hall, a pirate ship, and bumper cars, among others.
Ms. Qiong Jin, the CEO and Chairman of the Company, commented, "The trial operation of the Park is a significant step towards addressing the entertainment needs of families in the local area. The trial operation results have met our expectations. The Park offers a valuable model for future projects. Our goal is to establish the Park as an entertainment hub in the local area while advancing the Company's sustainable development and profit objectives."
In Summary…
Many Chinese stocks have traded at a discount to global peers for over a decade but have rarely been cheaper than they are now. There is optimism that China’s economy will soar back. With its population, the second largest in the world after India, it may be only a matter of time for Chinese stocks to experience a tremendous rebound.
The country's massive population and geographical area provide it with the perfect set of ingredients to develop a large economy and provide an opportunity for investors seeking an entrance to a growing market.
Tourism is a pillar industry in China and the recovery trajectory has flourished since the start of 2023. The country is ramping up efforts to capture visitors.
Next to Disney, other world-renowned theme parks with strong IP are also actively making forays into the Chinese market with heavy investment. This sends a signal that foreign capital is confident that the world's second-largest economy will remain a major tourism and entertainment market.
Golden Heaven Group Holdings is tapping into a market not addressed by the mega theme park operators and has a strategic plan for growth ahead.
Golden Heaven Group Holdings (NASDAQ: GDHG) opens the doors for diving into China’s massive theme park industry and could see exponential growth ahead!
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