A MEMBER OF THE TA GROUP
Monday, August 18, 2025
FBMKLCI: 1,576.34
Sector: Gaming
Genting Malaysia Berhad
Disposals of Non-Gaming Assets in RWC
Announcement
Genting Malaysia (GENM) announced that it is undertaking the proposals below:
- Selling its non-gaming assets comprising the 332-room Resorts World Catskills (RWC) hotel, 99-room Alder Hotel, 18-hole Monster Golf Course, 2,500-seat RWC Epicenter and multiple restaurants, to Sullivan County Resort Facilities Local Development Corporation (SCRFLDC) for a cash consideration of US$525mn;
- Purchasing 1,554.6 acres of land parcels from EPR Properties (EPR) for a cash consideration of US$201.3mn, to be funded via proceeds from the disposals of non-gaming assets above-mentioned;
- Redemption of the US$300mn 7.75% senior unsecured notes due I November 2026 issued by Empire to be funded via proceeds from the disposal of non-gaming assets above-mentioned;
- Entering into a land lease with SCRFLDC through February 15, 2066 for all land under the non-gaming assets; and
- Entering into a 20-year management agreement (with automatic renewal for 2 successive 5-year period) with SCRFLDC to manage all the non-gaming assets.
Our takes
We are positive on this US$525mn (RM2.2bn) sale and leaseback proposals. We also like the use of disposal proceeds to redeem the US$300mn notes, which are listed on the Singapore Stock Exchange, as it will provide an annual saving of US$2.3mn/year. Meanwhile, the acquisition of land would augur well for Empire Resorts’ future expansion plan. According to announcement, the acquisition of land will allow the company to control over the land on which RWC gaming and non-gaming assets are built (420 acres), in addition to 1,134.6 acres of vacant land which have development potential.
No change to our FY25-27 earnings estimates as we believe savings from coupon payments and building depreciation cost will be offset by depreciation and finance costs related to right-of-use assets.
Valuation
We maintain GENM’s DCF valuation at RM2.24/share with unchanged CAPM of 19.3%. Maintain Buy
| Share Information | |
|---|---|
| Bloomberg Code | GENM MK |
| Stock Code | 4715 |
| Listing | Main Board |
| Share Cap (mn) | 5,653.6 |
| Market Cap (RMmn) | 11,758.0 |
| 52-wk Hi/Lo (RM) | 2.58/1.46 |
| 12-mth Avg Daily Vol (‘000 shrs) | 12,846 |
| Estimated Free Float (%) | 50.7 |
| Beta | 0.9 |
| Major Shareholders (%) | |
| Genting Berhad | 49.3 |
| Forecast Revision | ||
|---|---|---|
| FY25 | FY26 | |
| Forecast Revision (%) | 0.0 | 0.0 |
| Net profit (RMmn) | 430.8 | 836.1 |
| Consensus | 531.5 | 507.3 |
| TA’s / Consensus (%) | 81.1 | 164.8 |
| Previous Rating | Buy (Maintained) | |
| Consensus Target Price (RM) | 2.14 | |
| Financial Indicators | ||
|---|---|---|
| FY25 | FY26 | |
| Net Debt / Equity (x) | 0.7 | 0.6 |
| FCPS (sen) | 8.4 | 15.0 |
| P/FCPS (x) | 24.0 | 13.4 |
| ROA (%) | 1.5 | 3.1 |
| NTA/Share (RM) | 1.3 | 1.4 |
| P/NTA (x) | 1.5 | 1.5 |
| Share Performance | ||
|---|---|---|
| Price Change (%) | GENM | FBM KLCI |
| 1 mth | 1.0 | 3.3 |
| 3 mth | 13.5 | 0.3 |
| 6 mth | (16.5) | (0.5) |
| 12 mth | (20.5) | (2.9) |
(12-Mth) Share Price relative to the FBMKLCI
Source: Bloomberg
A MEMBER OF THE TA GROUP
Sector Recommendation Guideline
OVERWEIGHT: The total return of the sector, as per our coverage universe, exceeds 12%.
NEUTRAL: The total return of the sector, as per our coverage universe, is within the range of 7% to 12%.
UNDERWEIGHT: The total return of the sector, as per our coverage universe, is lower than 7%.
Stock Recommendation Guideline
BUY : Total return of the stock exceeds 12%.
HOLD : Total return of the stock is within the range of 7% to 12%.
SELL : Total return of the stock is lower than 7%.
Not Rated: The company is not under coverage. The report is for information only.
Total Return of the stock includes expected share price appreciation, adjustment for ESG rating and gross dividend. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting.
Total Return of the sector is market capitalisation weighted average of total return of the stocks in the sector.
ESG Scoring & Guideline
| Scoring | Environmental | Social | Governance | Average |
|---|---|---|---|---|
| ★★★ | Deforestation occurs when integrated resorts and theme park are built but the company has restored about 10,000 acres of forest in Genting Highlands. | Gambling addiction affects individual and family. It is also a boon to certain unlawful activities such as illegal money lending. | The winning of global regulatory awards indicates that Genting group has taken proactive measures to align to group the various anti-money laundering directives. | ★★★ |
| ★★★★★ (≥80%) | : Displayed market leading capabilities in integrating ESG factors in all aspects of operations, management and future directions. | +5% premium to target price |
| ★★★★ (60-79%) | : Above adequate integration of ESG factors into most aspects of operations, management and future directions. | +3% premium to target price |
| ★★★ (40-59%) | : Adequate integration of ESG factors into operations, management and future directions. | No changes to target price |
| ★★ (20-39%) | : Have some integration of ESG factors in operations and management but are insufficient. | -3% discount to target price |
| <20% | : Minimal or no integration of ESG factors in operations and management. | -5% discount to target price |
Disclaimer
The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein.
As of Monday, August 18, 2025, the analyst, Tan Kam Meng, who prepared this report, has interest in the following securities covered in this report:
(a) nil
Kaladher Govindan – Head of Research
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