An expansion in gaming capacity and the addition of more hotel rooms at Resorts World Genting (pictured), Malaysia’s only casino resort, are strong catalysts for Genting Malaysia Bhd, said a report from CIMB Research, a research firm specialising in Asian equities.
“In a recent site visit to Genting, we learnt that another 1,300 rooms will be ready by year-end. We estimate that the casino floor extension could add another 250 tables to its existing 600 tables. We forecast 100 new table additions in FY16 and 50 new tables annually thereafter,” said the report published on Friday.
Genting Malaysia, part of Malaysia-based conglomerate Genting Bhd, on Thursday announced its plans for a new open air zone of shops and restaurants at Resorts World Genting. The new zone, called Sky Avenue and Sky Plaza, will offer 400,000 square feet (37,161 sq metres) of retail and dining space, and is scheduled to launch in 2015, according to local media reports.
The firm also expects to complete by 2016 a movie industry-based theme park called Twentieth Century Fox World, at a cost of about MYR1 billion (US$287.8 million).
The sprawling Resorts World Genting property, at Genting Highlands hill resort, is approximately an hour’s drive from Malaysia’s capital Kuala Lumpur, and opened in 1965. The theme park and new shopping and dining zone is part of a MYR5-billion redevelopment plan, officially dubbed the ‘Genting Integrated Tourism Plan’.
The company received regulatory approval in September to raise up to MYR5 billion via medium-term notes.
The opening of the theme park and of a shopping area called Genting Premium Outlet, is likely to bring more visitors to the site in 2016, said CIMB. The research house added it expects “a 20 percent jump in mass market wins per table and slots for FY16”.
“As the sole casino monopoly in the region, it [Genting Malaysia] is insulated from the anti-corruption crackdown in China as its customers are local mass market and ASEAN-based VIPs,” said the research firm, referring to the Association of Southeast Asian Nations, a club of regional economies that includes Indonesia, the Philippines, Singapore and Thailand as well as Malaysia.
“We expect a strong re-rating of the stock in the second half of 2015 as the market anticipates the new table additions,” said the research house of Genting Malaysia.
CIMB added the firm is the frontrunner to win one of four casino licences for upstate New York, with a decision expected this month.
RW Orange County LLC, a unit of Genting Malaysia, has proposed two separate billion-dollar casino projects for upstate New York. Genting Malaysia already operates Resorts World Casino New York City, which opened in 2011.
“With the U.S. mid-term elections out of the way, we expect an announcement of the winners of the New York upstate casino bids by year-end,” said CIMB.
“Despite the stiff competition in Orange County (six bidders), Catskills region, we are confident of Genting Malaysia winning one of the bids,” said the research house.
It added: “Genting Malaysia has offered the highest licensing fee for Sterling Forest casino and 50 percent to 100 percent higher salaries for both its casino bids. It also has strong lobbyists and has made significant campaign contributions.”
The New York casino selection panel is expected to announce its decisions on December 17, when it holds its next and final meeting.
“We expect the new casino to start in early-2017 as the winners are given 24 months to commence gaming activities upon winning the bid,” said CIMB.
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