(CapitalWatch, Nov. 21, New York) Chinese theme parks operator Golden Heaven Group Holdings Ltd. has applied for an initial public offering in New York.
Based in Nanping, Fujian province, Golden Heaven operates amusement parks and recreational facilities, six in total, in the south of China. They span over 426,560 square meters and are accessible to an aggregate population of 21 million people, according to the prospectus filed with the U.S. SEC in early November.
Like all public recreation businesses, Golden Heaven's financial performance was hurt during 2020, when the Covid-19 outbreak forced mass shutdowns. However, the company seems to have recovered since and has logged stable growth.
In the year ended September 2021, Golden Heaven's revenue grew 38% to $38.5 million compared with the preceding 12 months. Net income widened 79% to $13.6 million. In the half-year ended March 2022, the company said it booked $20.8 million in revenue on $7.3 million in net income. There were 2.4 million and 1.1 million guest visits to the parks in the 12 months through September 2021 and the six months through March.
Golden Heaven sees future growth potential as China's per capita disposable income increases. Citing the National Bureau of Statistics of China, the company said it grew with a CAGR of 8.5% from 2013 to 2021; market analysis firm iResearch Inc. expects per capita disposable income in China to grow with a CAGR of 7.9% over the next four years.
Further, China's population has increased spending on entertainment – according to iResearch, that figure will increase with a CAGR of 10.3% from 2021 to 2026. And the number of tourists to China is also expected to increase – McKinsey & Company estimated that the Chinese tourism market will recover to its pre-Covid level next year.
Golden Heaven's business plan involves attracting more guests to its parks, raising prices as it introduces new products and upgrades, broadening service packages, and optimizing project management. The funds from the IPO will be used to invest in or acquire businesses in the market of amusement park development, for the upgrading of its existing parks and software systems, improving internal control, raising brand recognition, and other purposes.
Golden Heaven is an offshore entity that directly holds 100% equity interests in the Chinese operating entities.
The company has reserved the ticker symbol "GDHG" for its potential listing on the Nasdaq Stock Market. Revere Securities is underwriting the deal. The terms of the offering are yet to be disclosed.