Genting puts back launch of Malaysian theme park: CIMB
Genting Malaysia Bhd has postponed the opening of a planned 20th Century Fox theme park in Resorts World Genting (pictured), CIMB Securities Ltd said on Monday. Resorts World Genting, also known as Genting Highlands, features Malaysia’s only licensed casino operation.
“The 20th Century Fox theme park opening has been delayed until 2017, a negative development, in our view,” CIMB Securities stated. “However, the new shopping mall/podium and additional gaming capacity will come on stream from the second half of 2016 onwards (versus late-2016),” analyst Marcus Chan wrote.
The theme park is part of the MYR4-billion (US$946.1 million) first phase of the ‘Genting Integrated Tourism Plan’ – a revamp scheme for Resorts World Genting – previously scheduled to be fully completed by end-2016. The park is to feature 25 movie-inspired rides. Genting Malaysia announced in 2013 that it would spend MYR5 billion over 10 years to revamp the resort.
“Due to the sudden weakness of the ringgit, Genting Malaysia is undergoing a review of the theme park design, budget costing, equipment sourcing and ticket pricing,” Mr Chan stated.
He added: “Management has not revised the estimated total capex of MYR5 billion for the ‘Genting Integrated Tourism Plan’ but we believe it is likely to be raised marginally in view of the high import content related to the theme park equipment.”
The Malaysian currency has declined by 20 percent against the U.S. dollar so far this year.
The CIMB note followed a meeting organised by the investment bank between Genting Malaysia’s management and eight fund managers. The meeting took place on October 9.
Genting Malaysia also operates casinos in the United Kingdom, the United States and the Bahamas. The firm recently issued 2.4-billion ringgit worth of mid-term bonds to use as working capital, including for financing the Genting Highlands revamp project.
Mr Chan added that Genting Malaysia “is preserving its marketing dollars for an aggressive push only when the new gaming capacity is ready”. At present, the firm “is focusing on customer retention efforts by increasing marketing spend on existing core customers via room and toll rebates and gaming promotions in conjunction with its 50th anniversary celebration,” he noted.
Despite that, and although the revamp of the property is still undergoing, visitor trends at Resorts World Genting “are positive, coming off a low base and weak ringgit”, stated CIMB’s report. The number of visitors increased by 7 percent in year-on-year terms in the first half of 2015.
“There has also been an increase in Chinese visitors given that the Malaysian government has waived visa requirements. It is estimated that one in two Chinese tourists that come to Malaysia ends up visiting Genting Highlands,” added Mr Chan.
Malaysia announced in August a visa waiver scheme for groups of 20 or more mainland Chinese tourists visiting the country.
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