TOKYO -- A new attraction at Tokyo Disney Resort is drawing big crowds that help sustain a major round of investments in the 36-year-old theme park site.
The Soaring: Fantastic Flight ride, which simulates a whirlwind tour around the globe, cost 18 billion yen ($170 million). One fan tweeted that it was "worth the wait in line," which often runs to around three hours even weeks after its late-July debut.
Tokyo Disney operator Oriental Land stock has hit fresh highs. With a market capitalization topping 5.6 trillion yen, Oriental Land is now the 12th-most-valuable listed Japanese company, topping such multinationals as Honda Motor and Nintendo.
Oriental Land has big spending plans lined up at the resort, which spans Tokyo Disneyland and Tokyo DisneySea. A "Beauty and the Beast"-themed area debuts in 2020, followed by a "Toy Story"-themed hotel in fiscal 2021, as part of efforts costing more than 100 billion yen.
The company plans to pour 250 billion yen into expanding Tokyo DisneySea. It earmarks about 100 billion to 150 billion yen a year in overall investments starting in fiscal 2020.
Strong earnings are fueling this capital spending. Oriental Land's net profit grew 11% on the year to a record 90.2 billion yen for the year ended March, when Tokyo Disney Resort celebrated its 35th anniversary. It had expected fewer visitors this year, since fiscal 2018 was so tough to follow, but attendance remains strong.
The stock now trades at around 78 times forward earnings, but few analysts see it as overvalued.
Oriental Land is "a growth stock that offers a clear outlook of profit increase based on its investment plans," said Tomoaki Kawasaki of Iwai Cosmo Securities. It rose 90 yen to close Wednesday at 15,630 yen.
Shun Tanaka of SBI Securities said the company met with a cold response when it invested 21 billion yen in the Tower of Terror thrill ride, which opened in 2006. "But given its subsequent growth, the ongoing capital investment plans offer some assurance," Tanaka said.