1. What is Sim Leisure’s business, and what are some of its key business segments?
Sim Leisure Group specialises in the development, operation and management of leisure and themed attractions. Since launching the Escape adventure park in Penang in 2012, the company has pioneered a new genre of retro-eco, family-friendly outdoor fun in Malaysia, experiencing significant growth. The group has two primary business segments:
- Theme Park Operations, focuses on the management and operation of various theme parks. Highlights include the addition of a water park to the Escape adventure park, featuring the world’s longest slide, and the 2021 launch of Escape Challenge, Malaysia’s first indoor adventure park. This segment also includes the acquisition and revitalisation of KidZania Malaysia and KidZania Singapore, with the latter reopening to the public in May.
- Design and Theming Construction focuses on designing and constructing themed attractions, primarily in the Gulf Cooperation Council (GCC) region. Incorporated as Sim Leisure Gulf Contracting (SL Gulf) in 2013, the company leverages over 30 years of industry experience and has significantly contributed to the group’s revenue.
2. Could you share more on Sim Leisure’s recent financial performance?
Across the group’s two main business segments:
- Theme Park Operations in Malaysia and Singapore account for approximately 45% of the group’s annual revenue of RM135.5 million ($42 million) in FY2023 ended Dec 31, 2023. It remains the core business, contributing over 60% of the group’s profit after taxation of RM29.1 million in FY2023.
- The Design and Theming Construction segment operates primarily in the GCC region and contributed approximately 55% of the group’s annual revenue in FY2023. It is managed through a 60%-owned subsidiary company.
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Group revenue for 1HFY2024 was RM86.8 million, up 56.2% from RM55.6 million in 1HFY2023. 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 and theming, design and refurbishment work for new and existing attractions in the UAE.
Overall, Sim Leisure 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. What are the key factors driving Sim Leisure’s revenue growth, and how does the company plan to sustain this growth?
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We don’t see ourselves as operating typical “theme parks”, although we are 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 a century.
We are different because we are dedicated to the innovation of rides and the provision of what we think matters most: providing unique novel experiences, especially for the younger generation rather than copying and repeating roller coaster rides, named after movie franchises.
4. How does Sim Leisure differentiate itself from other theme park players? We set ourselves apart by prioritising experiential entertainment over movie-based attractions.
We see the future of family fun in three main areas:
- Re-introducing outdoor play in nature. We emphasise fun and adventure in natural environments, encouraging a reconnection with nature.
- Amplifying experiences using virtual reality (VR) technology: We leverage VR to enhance and transform the entertainment experience.
- Bringing outdoor parks indoors, especially in Asia where there is an oversupply of malls, making indoor attractions a viable and exciting option.
The Covid-19 pandemic has boosted trends like reconnecting with nature and reduced visits to traditional malls in favour of online shopping. Moreover, technological progress during this time has increased interest in VR entertainment.
By proactively investing in emerging trends, we continue to differentiate ourselves from our competitors. Our Escape brand exemplifies our commitment to this effort as we roll out our fifth park in 12 years.
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Theme park brands under Sim Leisure Group URR . Photo: Sim Leisure
5. Does the group have a dividend policy?
Our company does not adhere to a fixed dividend policy at present. Our decisions regarding dividends are contingent on factors such as cash flow, earnings and expansion requirements.
We aim to reward shareholders and all stakeholders, with these rewards taking various forms beyond traditional dividends. For example, offering unique experiences and tokens for in-park consumption and purchases at our parks and attractions or some revenue sharing opportunities through attractive fixed-return instruments associated with our new ventures.
We aim to attract a diverse group of customers, investors and shareholders who align with our vision. As we develop the Sim Leisure community platform, we hope some of our annual park visitors of about 500,000 may become shareholders and vice versa.
6. What are some recent notable developments?
We have successfully completed and launched two new major parks recently: The adventure-based 120-acre Escape Ipoh Park and the children’s role-play educational entertainment city of KidZania at Sentosa Singapore. These new parks are expected to enhance our top-line growth further, adding to our portfolio of five operating theme parks comprising two KidZania City facilities in Kuala Lumpur and Sentosa, two outdoor adventure parks under the Escape brand in Ipoh and Penang, and one indoor Escape challenge park in Selangor.
7. Does the group have any expansion or acquisition plans?
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” entertainmenthub concept offers an exciting mix of nine leading attraction brands, including Escape Challenge Adventure Park, Funday Adventure Playground, Haven XR Centre, SIM Coaster Ride, Carnival funfair rides and skill games, Mini Miner mining experience, Digger Builder construction play space, Naked Eye motion simulator ride, and Snow Village winter wonder playland, all within one location.
We are working on our exciting 75-acre adventure park Escape @KL Base for a Phase 1 launch in 2Q2025. This launch will offer various adventure games and activities with a chairlift facility. We also target 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 be filled with unique experiences under the Escape and KidZania brands by 2H2025.
Moreover, we are devoted to continually introducing new activities at our Escape Penang Park. This effort aims not only to uphold its status as Malaysia’s top theme park, according to Tripadvisor but also to enhance the enjoyment of our visitors.
Internationally, we aim to replicate our local successes with a revenue-sharing business model and possibly licensing our Escape brand and “Play Mall” concept. We see significant potential worldwide for the indoor “Play Mall” entertainment hub concept, which can transform and revitalise the mall experience.
8. What are Sim Leisure’s focused markets and why?
Are there plans to expand beyond these markets? We are concentrating on expanding our successful business model across Malaysia and replicating this success throughout the Asean region and China.
We do not consider entering the European, North American or Middle Eastern markets to be viable, as these regions are already saturated and do not exhibit a similar population growth trajectory that Asia has.
9. What specific sustainability goals has Sim Leisure set, and how does it measure progress?
From its inception, the Escape brand has embedded sustainability into its core values and philosophy, consistently championing a return to nature through outdoor activities. This new genre, which we pioneered, highlights our commitment to sustainability and eco-literacy as genuine selling points rather than just corporate rhetoric.
10. 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 that our competitors have missed. In addition, most of our competitors adopt Western business models in the regions we operate, which have consistently proven ineffective.
Emelia Tan is director of research and FinLit at SGX Group
