Cannot Understand why the price is still here, it may be a blockbuster quarter and the start of earnings uptrend from here. Reverse Covid basically!
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But I personally think the stock can go down even lower from this point since this is completely a turnaround story and i dont think a turnaround company can trade at a fair valuation…I am waiting for even cheaper prices (I would be happy even if they increase earnings and make it cheaper 
)
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They can’t achieve the target of building new parks every 3 years ,in fact last park was opened in 2016.The orissa park will open in 2025. 9 years there is no revenue growth except inflation driven Market is really worried about nill or negligible revenue growth for a long period. They have to accelerate their capex plans otherwise they are not going to get fair valuation
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Are Roller Coasters Actually Safe? - YouTube importance of safety in the amusement park industry
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Was going through their earnings call. Thought I would summarise it here, which touches on some of the topics including marketing.
Concerns:
Implementation of GST seems to have material impact, especially in Chennai. This would result in high ticket price that would test customer’s willingness to pay.
I dont know if GST is the prime reason to have resulted in low ROCE.
On the willingness to pay, when they expand the capacity, the price should come down as they need to attract a lower income people. This is a significant constraint on scaling out vertically. If I am right, the current strategy is to scale to multiple locations and target the higher income group that pays more for tickets. Rest is dependent on economy growth.
Tailwinds
It is interesting to note that the company is entering into digital advertising only now! But, at least they are in right path and not beating around the bush on that.
If things augur well, then there can be some good volume realisation through targeted marketing and improving customer relations.
However, there is a limit to success here. Each park can only grow to a certain peak volume. The key is to improve non-peak volumes and improve ARPUs.
But each park can be expanded to handle 3 million, provided the footfall picks up.
There is a good scope for expansion across regions. If ROCE is stabilised, this is a very good long term play.
What I like the most is the capital preservation, provided if management is good and ethical (which they are IMHO).
Views
Overall, I think the next 2-3 years are going to be a good year for them as long as there are no macro economic issues. The management is good and is quite conservative in their strategy, which is important for an capital intensive company.
Disclosure: Have a tracking position. Might scale up over next qtr
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Looking at imagica’s (loss making co since inception) footfalls one can make a good judgement as how the quarter gone by was…also mcap of imagica is 830 cr today in comparison to wonderla which is 1300 cr today with zero debt and three parks in operations. No brainer!
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And it seems to be playing out as expected with revenue for the quarter at near 150 Crore and PAT at 64 Crore.
See the results here.
Stock at upper cricuit post results.
AJ
Disclosure: Remain invested with a small allocation from May 2022.
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So their one quarter revenue is more than what they did for the whole of last year. Time and again, stock market proves to us that it is more a psychological test than an analytical one. I remember during Covid, the shares were down in the 100s and I would buy a trickle now and then but wasn’t confident enough to load up.
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How analytical is it look at the just the price or the PE?
The lessons here are to look at the environment, the reasons, and apply that analysis to the numbers available. But I have to agree, takes patience and constant vigilance.
I have listened to the audio recording of the concall. Waiting for the transcript. Does anyone know when that could be released?
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Just before the results my long term returns in Wonderla was 1.2% and after results it shot up to 12% in just two / three days. Sometimes nothing happens for years and a lot can happen in days.
No recommendation. However just thought to add an interesting data point in the context of your message.
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Wonderla focuses on non ticket revenue along with ongoing CAPEX plans:
With thanks
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The company has again raised its park ticket prices across three parks by 8-15% starting this month onwards.
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Top 100 Shareholders
some very prominent names including Damani and Dolly khanna
Top100Shares (kfintech.com)
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Data mining for profit.
“One of the frequencies of the RFID chipset will help us with all the payments and locker operations, and the second frequency RFID chipset will help in tracking the customers.
The project, expected to cost US$400,000, will be initially piloted at the Bangalore amusement park in 2023.
We will be able to track ride preferences of guests such as high thrill, family, and kids, including the numbers of rides utilized by a guest, as also the peak time and non-utilization time information of rides and facilities,” says Arun.
Q2 Results
Market had an interesting reaction to the numbers below.
| WONDERLA HOLIDAYS LTD | |||
|---|---|---|---|
| Sep-20 | Sep-21 | This Quarter | |
| Sales | 0.18 | 17.21 | 66 |
| Operating Profit | -9.15 | -3.50 | 14 |
| Net profit | -15.80 | -9.28 | 10.00 |
| OPM | 21% |
Looks like a good value to me at this price…For the full year they should do a PAT in excess of 150 cr and the Mcap is ~2000 Cr.
a) They might have headroom to improve ARPU by means of improving pricing and increasing non ticket revenues < F&B, merchandise sales>
b) Opening of new parks
c) < Maybe not immediate> Getting into management contracts with other parks in the country. The management has talked about this aspect but not sure how aggressively they are scouting for potential options- I feel this lever can significantly help them scale fast.
Disc: Invested
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another milestone.
Wonderla Holidays Ltd. MD, Arun Chittilappily, said, ” ‘Odisha is highly aggressive with respect to tourism development & investor facilitation. It took just 60 days for the dept. to allot us land for development”.
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and an another one in MP ?..
> The management of the Company are in discussions with the officials of Government of Madhya Pradesh exploring the possibilities for setting up an amusement park in the state
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