Are you planning to visit The Walt Disney Company’s DIS new Shanghai Disney Resort which is scheduled for a grand opening on Jun 16? Then you are probably too late. Because, as per Bloomberg reports, the theme park’s opening day tickets were sold out within just a few hours after they became available online.
The $5.5 billion Shanghai Disney Resort will be the company’s second largest theme park and its first in Mainland China. The Hong Kong Disneyland, inaugurated in 2005, was Disney’s first foray into China.
The Shanghai theme park was originally scheduled to open in Dec 2015, but was delayed as Disney, along with its joint-venture partner, Shanghai Shendi Group, decided to invest an additional $800 million to speed up the expansion of Shanghai Disney Resort. Most of the additional investment was directed toward adding new attractions to drive footfalls at the park. Notably, Disney holds a 43% stake in the resort, while Shanghai Shendi owns the remaining 57%.
Theme park lovers in China will be able to enjoy attractions like Mickey Avenue, Adventure Isle, Gardens of Imagination, Tomorrowland, Fantasyland and Treasure Cove. The Disney Resort will also have characters with fresh stories made for the Chinese people, apart from two hotels, a shopping area and 99 acres of lakes, gardens and parkland.
Despite the slowdown in China’s economy, the company remains optimistic on the success of the project and believes that the country’s short-term problems will not hurt the resort’s long-term success.
We believe the Disney’s Shanghai Resort will drive the company’s top line higher in the coming quarters. In the first quarter of fiscal 2016, Parks & Resorts revenues grew 9% to $4,281 million, whereas operating income jumped 22% to $981 million. The increase in operating income at the company’s domestic operations was due to higher footfalls and guest spending. Disney is presently focused on deploying capital toward the expansion of the Parks and Resorts business, thereby increasing its market share and creating long-term growth opportunities.
Disney carries a Zacks Rank #2 (Buy) and shares the space with the likes of Twenty-First Century Fox, Inc. FOXA, Time Warner Inc. TWX and Comcast Corporation CMCSA.
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