‘China curbs won’t af­fect Gent­ing Malaysia much’

The Sun (Malaysia) - - SUNBIZ -

PETAING JAYA: Al­lianceDBS Re­search opined that on­go­ing ef­forts to curb gam­in­gre­lated mar­ket­ing ac­tiv­i­ties of non-Chi­nese casino op­er­a­tors in China could re­strict vis­i­ta­tions of Chi­nese tourists re­gion­ally but not im­pact Gent­ing Malaysia sig­nif­i­cantly.

On Mon­day China de­tained 18 em­ploy­ees of Aus­tralia’s Crown Re­sorts on sus­pi­cion of pro­mot­ing gam­bling ac­tiv­i­ties.

The de­ten­tions sent shock­waves in re­gional gam­ing coun­ters due to con­cerns over the in­flow of Chi­nese vis­i­ta­tions to for­eign casino op­er­a­tors. Gent­ing Malaysia was not spared and its share price dropped 1.25% on Mon­day.

Gent­ing Malaysia’s share price rose four sen yes­ter­day to close at RM4.77 with some 7.58 mil­lion shares chang­ing hands.

The re­search firm said it has rel­a­tively small exposure to Chi­nese VIPs, with Malaysians dom­i­nat­ing vis­i­ta­tions to Gent­ing High­land.

Day trip­pers con­sti­tute about 70% of to­tal vis­i­ta­tions to Gent­ing High­land, while Chi­nese tourists only made up about 3% of to­tal vis­i­ta­tions.

Al­lianceDBS main­tains its “buy” rec­om­men­da­tion for Gent­ing Malaysia with a tar­get price of RM5.00.

“We fore­see three cat­a­lysts that will help re-rate the stock: (1) ad­di­tional gam­ing ca­pac­ity aris­ing from the launch of Gent­ing In­te­grated Tourism Plan (GITP), (2) weak ring­git to at­tract more for­eign tourist vis­i­ta­tions and en­cour­age more vis­its from Malaysians, which could ben­e­fit Gent­ing Malaysia, and (3) rising op­ti­mism on the group’s earn­ings out­look as the GITP launch could re-rate the stock closer to its in­trin­sic value,” the re­port said.

The group is on track to launch Sky Av­enue and Sky Plaza shop­ping malls, and the new cable car sta­tion by end-2016, and Twen­ti­eth Cen­tury Fox World out­door theme park by end-2017.

It ex­pects the num­ber of vis­i­tors to im­prove from 19 mil­lion in 2015 to 25 mil­lion by 2018, on track to meet­ing its tar­get of 30 mil­lion by 2020. The higher vis­i­ta­tions, cou­pled with the po­ten­tial avail­abil­ity of 300 new gam­ing ta­bles, are ex­pected to drive its earn­ings.

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