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Malaysian theme park operator seeks Catalist listing in Singapore

IPO proceeds will fund Sim Leisure Group's business expansion, ventures into new markets

Singapore

MALAYSIAN theme park operator Sim Leisure Group is planning an initial public offering (IPO) in Singapore to fund its business expansion. On Friday, it lodged a preliminary offer document to list its shares on the Catalist board sometime next year.

The company operates theme parks in Penang - Escape Adventureplay and Escape Waterplay - which cater to local and foreign visitors. Its founder and chief executive officer Sim Choo Kheng has been in the theme park development and operating business since 1993. He has also worked on the Egypt and Jurassic Park zones of Universal Studios Singapore, and the DreamWorks zone at Motiongate theme park in Dubai.

The company did not disclose how much it expects to raise, but Mr Sim told Bloomberg in an October interview that a sale of new and existing shares in Singapore could raise about S$10 million to S$12 million. In the interview, he also said that the deal could take place by next January.

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Proceeds from the deal will be used to fund Sim Leisure's expansion of existing theme park operations and its ventures into new regions such as China and other South-east Asian cities. The company also plans to expand its business through joint ventures and strategic alliances.

Mr Sim said he is very confident the Escape theme parks will be a "mega success locally and regionally".

"We've done very well in Penang Island with a population of 0.8 million. One can only imagine how we can perform in cities with over 10 million people ... I have applied my entire "kampong" childhood, over 28 years of theme park experience and investment into the theme parks since six years ago with my own life-savings."

According to the preliminary prospectus, the company's theme parks brought in RM9.68 million (S$3.2 million) in revenue last year, up from RM9.24 million in 2016, mainly due to increased ticket prices with the opening of Escape Waterplay. Its audited pre-income tax profit last year stood at RM1.71 million, down from RM2.89 million in 2016, due to pre-operating expenses of Escape Waterplay.

The Escape theme parks drew about 112,000 visitors in 2017, with some 185,000 visitors expected this year. Therefore, the company expects this year's revenue to increase. Revenue is also projected to increase further in 2019 with the launch of its new theme park, Escape Gravityplay, in the first half of next year.

Sim Leisure said its directors intend to recommend an annual dividend of a minimum of 30 per cent of net profit attributable to owners of the company in respect of FY2019 and FY2020, although this is no indication of the company's future dividend policy.

Zico Capital is the sponsor and issue manager, while RHB Securities Singapore and UOB Kay Hian are joint placement agents.