Genting M’sia and its parent are flying high thanks to recovery theme play

ALL seems to be fine with casino operator Genting Malaysia Bhd and its parent Genting Bhd now.

With the advent of nationwide vaccination and gradual re-opening of the economy with the lifting of movement control order (MCO 2.0) in the vicinity of their operations, both counters are once again darlings of investors.

While their glove maker counterparts come under intense share price pressure, both Genting Malaysia and Genting Bhd are quickly regaining their lost value.

Yesterday, Genting Malaysia officially unveiled the logo of its RM3.2 bil movie-inspired outdoor theme park, Genting SkyWorlds.

The planned opening of the outdoor theme park in 2Q 2021 will significantly enhance Genting Malaysia’s status as a provider of world-class entertainment and further boost its tourist visitations.

To recall, the long-awaited 26-acre theme park boasts 26 rides and attractions, incorporating 20th Century Studios brands and other intellectual properties (IPs) across its world-class rides and attractions. Genting SkyWorlds will be able to accommodate some 20,000 tourists.

UOB Kay Hian Research head Vincent Khoo conservatively expects the crowd-pulling outdoor theme park to boost Genting Malaysia’s earnings before interest, taxes, depreciation and amortisation (EBITDA) modestly by RM256.2 mil (+9%) per year.

The projection is based on an assumption of 9,000 visitors daily, average spending of RM260/pax (including food & beverage) and EBITDA margin of 30%.

“While the payback periods (12-13 years) may not be exciting for the project, it will positively elevate Genting Malaysia’s efforts in building an inspirational brand and entrench its standing as a world-class integrated resorts operator,” justified Khoo in a company update.

He added: “SkyWorlds which features potentially award-winning rides should also help lift Resorts World Genting’s (RWG) casino patronage.”

All-in, UOB Kay Hian Research maintained its “buy” rating on Genting Malaysia with a target price of RM3.40.

“We foresee the stock steadily recovering as more catalysts emerge – wide global dispensation of COVID-19 vaccines, a partial and an eventual full border re-opening, special dividends (in 1Q 2021) and the opening of the outdoor theme park (SkyWorlds) in 2Q 2021,” added the research house.

At 3pm, Genting Malaysia was down 2 sen or 0.7% to RM2.85 with 33.37 million shares traded, thus valuing the company at RM16.92 bil while Genting Bhd was up 2 sen or 0.43% to RM4.67 with 21.35 million shares exchanged hands (market capitalisation: RM18.1 bil). – Feb 24, 2021


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