KUALA LUMPUR (Apr 30): Parkson Holdings Bhd said its indirect subsidiary Parkson Corp Sdn Bhd (PCSB) has entered into an agreement with Studio Kingdoms Network Sdn Bhd (SKN) to establish a 70:30 joint venture in the business of operating a theme park, education centres, nursery centres, food and beverage operations and merchandising operations in Malaysia.

PCSB is a wholly-owned subsidiary of Parkson Retail Asia Ltd, which is in turn a 67.61%-owned unit of Parkson Holdings.

In a filing with Bursa Malaysia, Parkson said Studio Kingdoms will manage the JV company, which will be named Parkson Edutainment World Sdn Bhd.

“The initial project of the JV shall be situated in Maju Junction Mall, Kuala Lumpur, and shall involve a total investment of approximately RM11 million,” the filing read.

“In addition to the initial paid-up capital of RM1 million, both PCSB and SKN will provide the JV company an interest-free shareholders’ loan of up to RM7.8 million and up to RM2.2 million respectively.”

PCSB’s initial paid up capital will be sourced from internally-generated funds, the filing stated.

Parkson (fundamental: 1.8; valuation: 1.7) said any further funding requirements will be fulfilled by shareholders’ loans or external bank borrowings.

Under the JV, the theme park will operate within shopping malls in Malaysia, and feature 35 “Happy Toon World” characters from the US.

The education centres will feature the “Pygmalion” teaching method which originated in Japan and will target children aged between 30 months and 6 years old, the filing stated.

Nursery centres shall also be based on the Japanese method of “Zensyo Maitreya Nursery School” and shall operate as a child day care centre, aside from aiding in the improvement of the children’s discipline and knowledge.

Parkson said the JV is a complementary business to the group’s retail operations and will help attract footfall to the group’s store location.

However, Parkson said the JV is a new business venture for the group and will be highly dependant on the expertise of SKN.

It also said Parkson may face “relatively intense” competition from other “edutainment” players in the market, such as the Berjaya Times Square Theme Park and Kidzania at Damansara Perdana.

Parkson said the JV is expected to positively contribute to future earnings of the group.

Parkson shares closed unchanged at RM2.15 today, with a market capitalisation of RM2.243 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)