GGRAsia – GEN Malaysia theme park phased launch: analyst

GEN Malaysia theme park phased launch: analyst

Nov 01, 2016 Newsdesk Latest News, Rest of Asia, Top of the deck

The theme park 20th Century Fox World Malaysia at the nation’s only casino resort is likely to have a phased opening and to charge a premium for entry compared to some other themed attractions in that country, says a report from brokerage Maybank IB Research issued on Monday following a visit to the site.

The institution added it thought projected annual visitor numbers for 20th Century Fox World Malaysia – a Hollywood-themed attraction to be based at Genting Malaysia Bhd’s Resorts World Genting casino complex (pictured in a file photo) – were “achievable” even if the theme park entry price is higher than that for some rival attractions.

Maybank analyst Samuel Yin Shao Yang wrote, referring to the theme park’s brand owner: “21st Century Fox [Inc] expects 20th Century Fox World Malaysia visitor arrivals of four to five million per annum.”

He added: “Although we understand that ticket prices will be under MYR150 [US$36] (prices start from MYR83 at Legoland Malaysia and from MYR96 at Sunway Lagoon), we now believe 20th Century Fox World Malaysia’s visitor arrivals target is achievable due to visitor arrivals’ ‘spillover’ from Genting Highlands Premium Outlets, higher mainland Chinese visitor arrivals and new residential cum-hotel developments going forward.”

Mr Yin said it was expected the attraction would offer 25 rides when fully open.

The budget for 20th Century Fox World Malaysia is approximately MYR2.5 billion, according to previous notes by investment analysts. The scheme is part of a MYR8-billion first phase for a major revamp for Resorts World Genting. The redevelopment is known as the Genting Integrated Tourism Plan (GITP).

The two-phase plan is described by Genting Malaysia as a 10-year, MYR10-billion master plan launched in December 2013

Maybank’s Mr Yin said in his Monday note that guidance from Genting Malaysia management is that 20th Century Fox World Malaysia is likely to open in phases, starting in late 2017.

“We note that construction progress has been tepid over the last year,” he stated.

The analyst added: “We assume that 20th Century Fox World Malaysia will open in late first quarter 2018. While we now expect visitor arrivals of four million per annum going forward, visitor arrivals to theme parks typically require 12 months to fully ramp up because rides are typically opened gradually to entice visitors to return. Therefore, we forecast 2.3 million 20th Century Fox World Malaysia visitor arrivals in full year 2018 (3.0 million on an annualised basis) before ramping up to 4.0 million … visitor arrivals in full year 2019.”

Referring to other work for Resorts World Genting’s revamp, Mr Yin added: “We understand that recruiting construction workers has been challenging, as Genting Highlands Premium Outlets, Sky Avenue and Sky Plaza are being constructed concurrently. We understand that more construction workers will be available [for 20th Century Fox World Malaysia] once [those other works] are completed over the next two to four months.”

Premium Outlets project

The brokerage noted that Genting Malaysia does not own Genting Highlands Premium Outlets, and therefore the budget is not consolidated in the Genting Integrated Tourism Plan budget. It described the outlets project as 50 percent owned by another member of the Genting group, Genting Plantations Bhd, and 50 percent by Simon Property Group Inc, a U.S.-based commercial real estate company.

The facility will have a net leasable area of approximately 300,000 square feet (27,870 sq metres) that will house 150 designer and brand name stores.

“Genting Highlands Premium Outlets will be instrumental in driving visitor arrivals growth to Resorts World Genting. Also, we understand that Sky Avenue and Sky Plaza have been fully tenanted at premium rental rates,” said Maybank’s Mr Yin.

Sky Plaza is the portion of the resort revamp that will contain updated gaming space, according to investment analysts.

On October 21, the New Straits Times newspaper reported Genting’s group chairman Lim Kok Thay as saying that under the GITP the total amount of gaming space at the resort would not increase, but that the company might be able to put more tables into the space it would have available.

Mr Yin at Maybank noted: “Until recently, gaming activity at Resorts World Genting had been flattish. That said, we expect it to receive a significant boost from financial year 2017 onwards due to data-mining efforts and more visitor arrivals.”

He added: “We also note that mainland Chinese visitor arrivals to Malaysia are at record highs. Mainland Chinese are known the world over to be avid gamblers. There is also a construction boom within 15 minutes’ drive from Resorts World Genting that will accommodate more visitors and by extension, gamblers.”

The Maybank analyst said he believes airlines “appear confident that mainland Chinese visitor arrivals to Malaysia will continue to grow”.

“By our own tabulation, airlines plan to add capacity for flights from China to Malaysia by at least 14 percent year-on-year in first half 2017… we understand Genting Malaysia will also be indirectly marketed to mainland Chinese via Genting Resort Secret Garden, the ski resort owned by Genting Hong Kong [Ltd] in Hebei, China and one of the venues for the 2022 Beijing Winter Olympics,” he added.