Positive outlook for Genting despite theme park delays
Improved facilities and amenities gain traction among visitors
PETALING JAYA: Despite the likely delays of Genting Malaysia Bhd’s Skytropolis indoor theme park and 20th Century Fox attraction, the group’s outlook for the second half of financial year 2018 (FY18) remains positive, says RHB Research.
Visitor count to the hilltop resort increased by 21% year-on-year to 12.8 million as of June, due to the new facilities opened under the Genting Integrated Transformation Plan that included the SkyCasino, SkyAvenue mall and Awana Skyway cable car.
“A sturdy second half of FY18 is anticipated, as the improved facilities and amenities gained traction among visitors,” the research house said in a report following a visit to the hilltop casino resort.
RHB Research has revised the park’s visitor arrival assumptions to factor in the delay in both theme park openings and cut its earn- ings forecast for FY18 marginally, but lifted FY19-FY20 estimates by 3.2%
It said the opening of the 20th Century Fox is slated to be a major visitation re-rating catalyst despite the re-scheduling of the theme park being pushed towards the end of the first half of fiscal year 2019.
“While there could be some investor disappointment over the persistent theme park delays, we advise investors to accumulate the stock,” it said.
The tour, hosted by Genting Malaysia, was part of the research house’s ground-check initiative, which included the First World Hotel and Crockfords Hotel followed by an excursion to the SkyCasino.
The SkyCasino continued to be one of the key revenue-generating segments for Genting Malaysia.
“From what we saw, visitor arrivals to the hilltop casino during the mid-week remained robust despite it being an off-peak period,” the research house said.
Its mass market floor consists of about 200 tables and 1,000 slot machines.
The majority of the gaming participants were tourists from China, as the casino invites 10 to 20 tour groups from China per month, as per the analysts’ channel checks.
The brokerage said typically, visitor arrivals peaked around festive seasons and school holidays.
The opening of the Crockfords Hotel in November 2017 was seen to have benefitted premium customers, as most of its rooms have been offered as complimentary accommodation to draw visitors to the casino.
Rack rates for these rooms ranged from RM1,700 to RM10,000 per night.
The majority of these selected premium customers are Malaysian and Singaporean visitors with a higher likelihood of redeeming the complimentary rooms.
RHB Research has maintained its “buy” call on the stock with an unchanged target price RM6.12.
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