Buying Into the DreamWorks' and Melco Crown's New Creation in Manila


A casino and animation company might seem like an unlikely partnership, but this interesting
combination is creating something really cool. Photo: Yahoo! Finance

Much like Disney (NYSE: DIS  ) , DreamWorks Animation (NASDAQ: DWA  ) has been spending a lot of time in Asia in the last few years. DreamWorks is expanding its presence there even further through a partnership with Hong Kong's local casino giant Melco Crown (NASDAQ: MPEL  ) . This should excite Foolish investors who understand what a strong position in the Asian media market will mean for DreamWorks. And for movie lovers, what these two companies are building in Manila is incredibly cool.

Dreamworks CEO Jeffrey Katzenberg at the International Consumer Electronics Show in Las Vegas, January 2014. Photo: Associated PressA

Betting on China
DreamWorks and Disney currently have a big focus on China. The film and media industry there continues to explode. PricewaterhouseCoopers projects a value of $6.49 billion for the industry in 2017, more than double its $3.26 billion worth in 2012.

Oriental Dreamworks, a joint venture that includes production studios and attractions in Shanghai, is DreamWorks' answer to having on-the-ground operations in China. This "Chinese content company," in which DreamWorks Animation holds a 45% stake, is already working on some major projects for the company that include DreamCenter, an integrated production center for both film and live theaters as well as animation studios which will open in 2017. The company is also planning a $3.1 billion indoor theme park in Shanghai, which is set to open in 2018.

And now casino giant Melco Crown is creating an amazing new attraction in the Philippines
Melco Crown is one of the largest casino operators in Macau, where it boasted incredible first-quarter 2014 revenue as its properties there continued to bring in huge crowds. Now, the company is just about to open its newest resort in Manila, Philippines this year. When it does, DreamWorks will be in the casino with the world's first "Edutainment" center at Melco Crown's City of Dreams resort in Manila.

"DreamPlay by DreamWorks" will be an industry first. The experience, which is marketed to families as a way to learn through play, allows young and old alike to combine the best elements of the DreamWorks animation library with interactive, realistic activities. Interactive environments and the latest digital technologies will allow patrons to interact directly with their favorite animated characters. Imagine getting to learn martial arts side by side with Kung Fu Panda, playing in the mud with Shrek, or learning how to train your own dragon with the thrill of living the movie. 

Clarence Chung, President of Melco Crown Philippines, says it best with his statement that "Harnessing leading digital technologies, this attraction is going to be unlike anything that currently exists and will undoubtedly become a new type of destination for families, both in the Philippines and across the rapidly growing leisure-destination markets of Asia."

Paul Kurzawa, Head of Retail Development & Entertainment, DreamWorks Animation, said,
"Kids will be able to learn Kung Fu with Po, receive dragon flying lessons, learn how to create their own animated feature, and maybe even save a princess." See more here.

Disney is quickly gaining brand equity in the largest market in the world. Photo: Brand Channel

Disney's Asian presence is expanding as well
Disney is not new to Asian growth. Theme parks in Hong Kong and Japan have helped Disney report another terrific quarter in the first quarter of 2014, which followed a very successful 2013.

Disney is already pushing its brand and content to its Chinese audience. The company is linking U.S. screenwriters with writers and directors in China to create new Chinese film projects in the classic Disney style. These films with "Chinese elements" will help Disney to appeal to Chinese families in particular.

However, the most exciting advancement for Disney in Asia is the coming resort in Shanghai, the company's third in Asia. Disneyland Shanghai is under development now and set to open in 2015. By doing so, the company is bound to grow its brand equity and awareness further in China, and gain even more from this massive and growing market.

Foolish conclusion: undervalued DreamWorks is showing strong growth opportunities
DreamWorks stock has been beaten up recently after a few films flopped in the last few months. Disney, on the other hand, is a different story. With a few years of growth in Asian theme parks already, as well as a series of incredibly profitable recent movies, the valuation of Disney stock has continued to climb. With innovative growth initiatives, such as this new attraction created with Melco Crown in Manila, DreamWorks could be a very attractive investment at its currently low valuation for Foolish investors who are looking for long term value.

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