source: [thestar online]
Tourism plan likely to boost GenM's share price
PETALING JAYA: The unveiling of Genting Malaysia Bhd’s (GenM) integrated tourism plan for Resorts World Genting (RWG) could prove to be a key catalyst for GenM’s share price.
CIMB Research believes that the launch of the Genting integrated tourism plan, set for Dec 17, will be a key catalyst for GenM’s share price, if full details of RWG’s RM3bil capital expenditure (capex) programme is revealed.
So far, only RM1bil of the plan has been announced, which involves the 2,000-room expansion and the 20th Century Fox outdoor theme park.
“We expect RWG to further reveal projects that will fully capitalise on its unique position as the only integrated resort in Asean with a temperate highland climate,” the research house said.
Therefore, CIMB expects RWG to stay relevant and competitive amid a fast expanding industry landscape, and further underpin its position as a proxy to domestic consumption and tourism in the Klang Valley.
The launch of Genting’s integrated tourism plan will be held at the Genting International Showroom at RWG and is expected to be officiated by Prime Minister Datuk Seri Najib Tun Razak.
“Given its high-profile nature, we believe that full details of the RM3bil capex plan for Resorts World Genting will be revealed,” said CIMB.
It added that GenM’s recent share price underperformance following the weak third-quarter ended Sept 30 results, presented a buying opportunity.
“The current weak earnings spell is not unexpected on the back of the minimum wage and business disruption as RWG goes through an overhaul,” said CIMB.
Profit for the quarter almost doubled to RM322.62mil from RM190.35mil a year ago due to lower impairment losses from the group’s operations in the UK and the United States, reversal of previously recognised impairment losses, and higher assets written off.
The research house maintains its “outperform” rating and earnings per share forecasts and revised net asset value-based target price of RM5.70.
The counter closed 6 sen up at RM4.21 with some 4 million shares done.
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