Wonderla Holidays


(bmathew) #269

just dont go with what promoter is doing …remember few months back Kitex promoter was acquiring more and the stock had a free fall …wonderla is one of the highly priced and interestingly the footfall is falling down …so one can for sure buy at a lower rate when the market corrects …


(sambandham82) #270

Dear Bheesma,

Thanks for bringing in a contrarian approach to invest in Wonderla with a margin of safety through its deep value in land bank. I did an estimation of land value as follows :

Bangalore - 81.75 acres
Kochi - 93.17 acres
Hyderabad - 49.5 acres
Chennai - 63 acres

Total land = 288 acres.

How did u get 350.49 acres as total land ?

If i convert acre to feet, 288 X 43560 = 12545280 sq ft (1.25 Crore sq.ft).

As per your opinion, the entire land value is worth at least 2000 Cr which means 2000/1.25 = 1600 Rs/sq.ft.

Do you think land price is Rs 1600 / sq.ft in these city outskirts area ?

Being a Bangalorean, i know it may be worth around 1500 Rs/Sq.ft in Bidadi. But in other cities like Kochi and Hyderabad, don’t u think it may be as low as 800 ?


(sambandham82) #271

The land value is estimated to be 1400 Cr

City Locality Acres Sq.Feet Price/Sq.ft Value
Bangalore Bidadi 81.75 3561030 1500 5341545000
Kochi Pallikara 93.17 4058485.2 900 3652636680
Hyderabad Adibatla 49.5 2156220 1100 2371842000
Chennai old Mahabalipuram road 63 2744280 1000 2744280000
Total Land Bank 287.42 12520015.2 14110303680
1411 Cr

so we are getting the business that earned 38 cr in FY18 and is expected to reach 60 Cr in FY20 (due to revenue growth + improving margins) by paying 500 Cr.


(Bheeshma Sanghani) #272

Some acres in hyderabad park was consumed in building the interstellar mission ride. Overall it has significant unused land bank as you have calculated - the value of which offers additional valuation safety. Land rates depend upon the highest and best use of land and vary.


(Abhishek) #273

Not sure if we can value the business in that way. Wonderla can either have the land to dispose or have the amusement park business. It will not be able to generate any revenue without the land hence once cannot add the value of land assign a 500 crore value to the business.

I think a better way to look at it is that the land bank provides a great margin of safety on the valuation of Wonderla at approx 1900 crores. However, one always needs to be mindful of the fact that it is not easy to monetize such parcels of land away from the city center.

Only my humble opinion.


(sambandham82) #274

As per text book definition of capital employed, u r absolutely right that this land is employed in the business unlike cash on book but land value play a major role while calculating the terminal value. unlike other business where their assets in the book are ever depreciating, this land asset of 1400 CR that forms 70% of mkt cap, always appreciate over long term. The balance sheet of this business is unique, more like agriculture and mining where asset remains an asset forever.

One should keep in mind that out of 1900 cr, 1400 cr is invested in land that grows constantly with RoI of 10% and remaining 500 cr is invested in amusement business that currently earns 38 cr in FY18 at 8% RoI (worst margin in a decade) but has potential to give 12% RoI in the near future and also can be between 10-25% in the next 10 yrs. Hence I think it can be valued this way.

Since wonderla is located 28 km from Bangalore city centre, I have given 1500 Rs/sqft. I know on bangalore-mysore NH, plots are valued at 2500 but since it is 2 km off NH, I assumed 1500.

In all cities, it is located in a reasonably good location on NH, SH and outer ring road.


(..pd..) #275

https://www.wsj.com/articles/theme-park-developments-in-china-hit-crossroads-real-or-pixie-dust-1533034801


(Gorthi) #276

Is any one have the details for how much land has been used vs initialised land to total land details for all the 3 parks… Thanks


(Bheeshma Sanghani) #277
Item Q1-19 Q1-18 2018 Growth
Revenue 10611.26 10542.66 27834.06 0.7%
Operating Expenses 4639.21 5866.69 18138.71 .
Operating Profit 5972.05 4675.97 9695.35 27.7%
OPM 56% 44% 35% .
Finance 36.44 37.19 120.68 .
Depreciation 989.33 799.94 3650.51 .
PBT 4946.28 3838.84 5924.16 .
PAT 3297.22 2595.55 3850.39 27.0%
Net Margin 31% 25% 14% .

Good margin expansion driven by cost efficiencies. Operating margin at 56%. The June Qtr accounts for almost half of the operating profit for the yr. Estimated operating margin for Fy19 given its revenue and operating profit distribution seems to be 38% - 40% and seems to be inching towards its historic 45% levels.

Growth in footfalls in Hyderabad is 22%. Overall footfall growth of 6%.


(Bheeshma Sanghani) #278

Attended the concall yesterday. The mgt guided for a topline growth of 10-12% and pat margin of 16-18%. While that would improve earnings growth, the valuations seem to be well incorporated and more. In my view and one can be wrong on this one - a massive growth in topline is required to justify the valuations. Margins will revert to the earlier levels and they seem to be doing that but currently there doesnt seem to be suppport on the topline growth front.

The sense i got is that pricing is an issue and while the co is trying to get more footfalls by giving packaged offers, the path taken by the mgt is concentrating on driving footfalls and thereby increasing non ticketing revenue.

In q3 - the mgt seemed confident that footfalls will increase in kochi park as group bookings will increase. Hyderabad is doing well and bangalore which has the highest prices and contributes to the max revenue is also expected to end with a footfall growth of 8%.

However, it is clear that there is pressure on revenue growth and its is being felt by the mgt. The other thing that the mgt stated was that ROIC for old parks is 25% while for newer parks its between 10-15% which is on the lower side and indicates that going forward the business may need to be revalued downwards in line with what returns are in it.

Best
Bheeshma


(almantri) #279

Though, this quarter is not major contributor as Q4, but Kochi getting affected due to flood in Kerala will have its impact overall on the footfall. Hope the park site has not been affected. Can anyone confirm please?