Genting Malaysia

Re: Genting Malaysia

Postby winston » Tue Aug 20, 2019 7:34 am

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11 things I learned from the 2019 Genting Malaysia AGM

By Shak Chee Hoi

1. Revenue grew 6.4% year-on-year to RM9.9 billion in 2018. The leisure and hospitality segment in Malaysia contributed to approximately two-thirds of GENM’s revenue in 2018.

2. GENM posted a net loss (including one-off items) of RM19.5 million in 2018 compared to earnings of RM1.2 billion the previous year.

3. The promissory notes carry fixed interest rates of 12% and 18% annually, which was deemed quite high and risky by one shareholder.

4. Resorts World Genting has 10,500 rooms spread across seven hotels. Two-thirds of room nights were taken up by Malaysians with the rest going to international guests mainly from Singapore, Indonesia, Thailand, China, and India.

5. Revenue contribution from the leisure and hospitality segment in the UK and Egypt fell by 6.0% y-o-y to RM1.8 billion in 2018 as the premium gaming segment recorded lower business volume.


Source: The Fifth Person

https://fifthperson.com/2019-genting-malaysia-agm/
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Re: Genting Malaysia

Postby winston » Thu Aug 22, 2019 9:22 am

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Genting Malaysia (GENM MK)
Empire “Strike” Discounted For Now; Upgrade To HOLD

We upgrade GENM to HOLD as share price has fallen close to our target price, although the unpopular RPT of acquiring Empire is likely to perpetuate a long-term ESG valuation discount on the stock.

The stake acquisition of Empire from ultimate holding company Kien Huat has moved on to the next phase of privatising the US listco without needing minority shareholders’ approval.

Further cash injection is likely.

Target price: RM3.01.
Entry price: RM2.80.

Source: UOBKH

https://research.uobkayhian.com/content ... dcaed3735c
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Re: Genting Malaysia

Postby winston » Sat Aug 24, 2019 7:25 am

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Genting Malaysia upgraded to ‘hold’

KUALA LUMPUR: UOB Kay Hian Malaysia Research has upgraded Genting Malaysia to “hold” as its share price has fallen close to its target price.

It said yesterday that the unpopular related party transaction of acquiring loss-making US-listed Empire Resorts is likely to perpetuate a long-term ESG valuation discount on the stock.

“The stake acquisition of Empire from ultimate holding company Kien Huat has moved on to the next phase of privatising the US listco without needing minority shareholders’ approval. Further cash injection is likely. Target price: RM3.01. Entry price: RM2.80, ” it said.

Genting Malaysia via Genting USA recently entered into a binding agreement to buy 46% of Kien Huat’s stake in Empire which owns Catskills Casino in Upstate New York from its holding company Kien Huat Realty for US$128.6mil or RM537.8mil.

Subsequently, both entities formed a JV called Hercules Topco LLC (Hercules) with Genting Malaysia (via GenUSA) holding a 49% stake (before potential dilution should Kien Huat exercise its preferred shares of Empire into ordinary shares).

The JV is formed to resolve Empire’s current liquidity issue via privatisation and restructuring efforts. Empire’s earlier filing with the US Securities and Exchange Commission said that if it cannot secure financing to bail it out, it may have to go the bankruptcy route.

Genting USA will need to inject its 46% stake in Empire and pay Kien Huat an additional US$9.4m to be entitled to have a 49% stake in Hercules.

Subsequently, GenUSA and KH will inject a further US$28.5mil (or RM119mil) and US$29.7mil (or RM124.1mil) respectively into Hercules, with most of the proceeds used to fund the privatisation of Empire.

Genting Malaysia will fork out a huge US$167mil cash to complete this JV proposal, including an initial stake acquisition of US$128.6mil (38% stake in Empire), US$9.4mil paid to Kien Huat and US$28.5mil (its 49% share of cash infusion to mostly fund Hercules to buy out minorities of Empire).

“We do not rule out the possibility of further cash infusion arising from Kien Huat converting its preferred shares in Empire to ordinary shares. That which would require Genting Malaysia to spend an additional US$36mil (assuming it pays the same price per share under the privatisation exercise), or/and a booster cash injection for Empire, which featured a huge negative EBITDA in 2018 and higher indebtedness (more than RM2.6bil), ” it said.

Source: The Star

https://www.thestar.com.my/business/bus ... T7zFjph.99
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Re: Genting Malaysia

Postby winston » Tue Aug 27, 2019 2:53 pm

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RHB Research sees values emerging in Genting Malaysia

by Justin Lim

KUALA LUMPUR (Aug 27): RHB Research Institute Sdn Bhd has maintained its "buy" call on Genting Malaysia Bhd (GenM) with sum-of-parts target price lowered to RM3.90 from RM4.40 previously, as the research house has imputed the estimated losses on Empire Resorts Inc.

The research house suggested that investors refocus on the fundamentals of the company's core business in Malaysia, which contributed 76% to 80% of the group's earnings before interest, taxes, depreciation, and amortisation (EBITDA) after the unwanted related party transaction incident, which is — ultimately — a non-core joint-venture asset.

"We believe the upcoming 2Q19 results (Sept 29) will continue the strong EBITDA trend from 1Q19, cushioning the impact of a tax hike.

"Recall that 1Q19 results were above Street's estimate — EBITDA grew 5% year-on-year (y-o-y) on better hold percentage, non-gaming segment growth and cost-saving initiatives.

Optimism on the expected opening of the outdoor theme park in 2020 will continue to drive long-term growth," the research house said in a note today.

On the recent acquisition of Empire Resorts that caused steep correction on GenM's share price, RHB Research opined that it has severely overshot GenM's fundamentals and its value has emerged.

It said GenM currently trades at 6.6 times enterprise value/earnings before interest, taxes, depreciation and amortisation (EV/EBITDA), with a 5.2% yield, which makes it more attractive compared to regional peers trading at 10 times with potential yield of 5%.

Meanwhile, the research house also said GenM's massive selldown has totally disregarded the asset value of a fully-built casino in Upstate New York that took about US$1 billion to build (excluding time costs and delays) along with a full-fledged licence.

"Moreover, the cost for a greenfield expansion is likely to top the acquisition costs," it added.

RHB Research believes GenM will aim to restructure Empire Resorts' debt to lower the higher debt costs (~12.2% including principal payments) and strive to achieve EBITDA neutral by FY20/21.

Notwithstanding that, the research house estimates net losses of US$71 million and US$51 million for Empire Resorts in FY20 and FY21, which slashes its earnings estimation by 9% and 6% for FY20 and FY21 respectively.

Source: The Edge

https://www.theedgemarkets.com/article/ ... g-malaysia
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Re: Genting Malaysia

Postby winston » Fri Aug 30, 2019 9:44 am

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Genting Malaysia (GENM MK)

Share Price: MYR3.12
Target Price: MYR3.24
Recommendation: Hold

On a lucky strike but Empire Resorts acquisition weighs

2Q19 earnings and dividends positively surprised us.

While GENM has had success managing the impact of the 10ppt casino duty rate hike and its corporate tax rate bill, its recent acquisition of Empire Resorts will weigh on long term earnings.

Our FY19/FY20/FY21 EPS estimates are adjusted by +11%/-19%/-10% and our SOP-TP is cut to MYR3.24 from MYR3.80.

Source: Maybank

https://factsetpdf.maybank-ke.com/PDF/1 ... 0c5e36.pdf
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Re: Genting Malaysia

Postby winston » Fri Aug 30, 2019 1:49 pm

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Genting Malaysia enjoys improved 2Q19 showing on better luck at Resorts World Genting

Genting Malaysia granted leave for judicial review of MOF amendment to tax incentives

Genting Malaysia Berhad reported improved results in the three months to 30 June 2019, with revenue, EBITDA and profit all creeping north on the back of the contribution from its Malaysian integrated resort, Resorts World Genting (RWG).

Group revenue and net profit for the period both climbed 7% to MYR2.60 billion (US$616.8 million) and MYR403.1 million (US$95.6 million) respectively, while Adjusted EBITDA registered marginal improvement at MYR711.5 million including a 53% increase in Adjusted EBITDA contribution from the company’s UK and Egypt properties to MYR45.1 million.

At RWG, the group’s flagship property located outside Kuala Lumpur, revenue grew 10% in 2Q19 to MYR1.76 billion (US$417.5 million) although Adjusted EBITDA remained flat at MYR540 million (US$128.1 million).

Genting Malaysia said it saw an overall decline in gaming volume for the quarter after reducing the incentives it offered customers due to cost rationalization initiatives, but results were boosted by higher hold in the mid-to-premium players segment.

The group also recorded a reversal of provision for contract termination related costs of MYR60.2 million in relation to the outdoor theme park at RWG after settling a dispute with Twenty-First Century Fox Inc and Walt Disney Co.

Genting Malaysia’s UK and Egypt operations reported a 4% decline in revenue to MYR420.1 million, mainly due to lower contribution from the group’s interactive business, while the US and Bahamas enjoyed a strong 10% increase to MYR378.1 million.

The improvement was credited to both gain on foreign exchange and higher business volume at Resorts World Casino New York City.

Looking ahead, the company said it is now working on the development of its outdoor theme park following the resolution of its legal dispute, with an opening date to be confirmed in the coming months.

Source: Inside Asian Gaming

https://www.asgam.com/index.php/2019/08 ... d-genting/
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Re: Genting Malaysia

Postby winston » Fri Aug 30, 2019 2:07 pm

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Genting Malaysia (GENM MK)
2Q19: Clipped Wings


Despite delivering a strong and consensus-beating EBITDA, as presumably a sustained above-theoretical win rate and deep cost cuts offsetting the 10ppt hike in gaming duties, upside is limited by the recent stake acquisition of US-listed Empire Resorts (Empire).

Specific concerns include further cash infusion into the loss- making Empire and GENM’s potential exclusion from the ESG index, which could prompt further institutional selling.

Maintain HOLD. Target price: RM3.01. Entry price RM2.80.

Source: UOBKH

https://research.uobkayhian.com/content ... d9b0005335
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Re: Genting Malaysia

Postby winston » Mon Sep 02, 2019 10:11 am

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2Q19: Win rates remained high

1H19 core net profit was in line with our (54% of our FY19F) but beat market expectations (65% consensus).

High gaming win rates likely not sustainable.

Malaysia EBITDA rose 2.0% yoy in 1H19, which was impressive considering the casino tax was raised by 10% pts at the start of this year.

Maintain Hold. Our TP dips as we add a 10% discount to its RNAV to reflect potential earnings risk from Empire Resorts and lower gaming win rates.

Our TP falls from RM3.50 to RM3.15, now based on a 10% discount to our RNAV (no discount before) due to earnings risks from:-
i) potential losses from ER and
ii) possibility of luck running out soon for its VIP gaming division.


Source: CIMB

https://brokingrfs.cimb.com/K8ySEh_bMGc ... HCj3g2.pdf
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Re: Genting Malaysia

Postby winston » Mon Sep 02, 2019 10:11 am

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2Q19: Win rates remained high

1H19 core net profit was in line with our (54% of our FY19F) but beat market expectations (65% consensus).

High gaming win rates likely not sustainable.

Malaysia EBITDA rose 2.0% yoy in 1H19, which was impressive considering the casino tax was raised by 10% pts at the start of this year.

Maintain Hold. Our TP dips as we add a 10% discount to its RNAV to reflect potential earnings risk from Empire Resorts and lower gaming win rates.

Our TP falls from RM3.50 to RM3.15, now based on a 10% discount to our RNAV (no discount before) due to earnings risks from:-
i) potential losses from ER and
ii) possibility of luck running out soon for its VIP gaming division.


Source: CIMB

https://brokingrfs.cimb.com/K8ySEh_bMGc ... HCj3g2.pdf
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Re: Genting Malaysia

Postby winston » Sat Sep 14, 2019 7:00 pm

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Aug 30, 2019

Exceptionally Good Luck in 1H19

Valuation

Given the change in earnings projections, we cut GENM’s DCF valuation to RM3.30/share (from RM3.47 previously).

However, given the sharp fall in share price (app.15%) post the announcement of JV investment in Empire Resorts, we think the market has sufficiently priced in near-term earnings risks from this JV.

As such, we upgrade GENM to Hold (from sell previously).


Source: TA Securities
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