GGRAsia – Genting theme park cost to go above US$700mln: analyst

Genting theme park cost to go above US$700mln: analyst

Oct 21, 2019 Newsdesk Latest News, Rest of Asia, Top of the deck

Genting Malaysia Bhd’s heralded outdoor theme park for its Genting Highlands casino resort (pictured) near Kuala Lumpur, Malaysia, will “incur more“ capital expenditure before it can be completed, “which we did not expect,” said Maybank Investment Bank Bhd in a Monday memo.

The note to investors followed a site visit to the facility at the gaming complex – Resorts World Genting – held for analysts on Friday.

“Genting Malaysia expects to incur more capex to complete the outdoor theme park in addition to the capex to date of approximately MYR3 billion [US$717 million] but has not quantified how much yet,” said Samuel Yin Shao Yang, of the bank’s unit Maybank IB Research.

The institution said it was likely the outdoor theme park – described as 26 acres (10.5-hectares) in area – would have a soft opening in the third quarter of 2020, with 20 rides at that stage – four of them rollercoaster-type attractions – using “Fox intellectual property”. The latter was a reference to the Fox entertainment brand. Assets of that brand were recently subject of a takeover move by Walt Disney Co, that was clinched in March.

When construction of Resorts World Genting’s outdoor theme park is completed it will have 25 rides, “of which two will run underground,” suggested Maybank.

“For the remaining five rides, Genting Malaysia may employ intellectual properties from other studios but has not decided on which ones yet. This is why the outdoor theme park cannot reassume its previous name, 20th Century Fox World,” wrote Mr Yin.

The analyst said that work on the theme park structures “must be completed by first quarter 2020 to allow for several months of rides testing”. “Fox Disney” would need to provide “final certification,” before anything could open, noted the analyst.

‘Dynamic pricing’

In July Genting Malaysia said it had reached a settlement “fully resolving” a US$1-billion lawsuit versus several entities of the Fox entertainment brand and the Walt Disney Co.

Mr Yin gave guidance in his Monday memo that Genting Malaysia management expected the theme park to have circa 1,100 employees, 40 percent of whom had already been hired, with the remainder due to be taken on “three to four months” before the soft opening.

“Curiously, Genting Malaysia now does not provide guidance on average ticket prices (approximately MYR200 previously, Maybank Kim Eng forecast: MYR150),” wrote Mr Yin.

The casino firm had given guidance it would use “dynamic pricing” for the facility – i.e., higher prices during peak periods and lower ones at other times – and that there would be “no distinction” in ticket pricing between Malaysians and non-Malaysian patrons.

The outdoor theme park would have seven restaurants – three of them “outsourced” and 11 food kiosks, said Maybank. “Initially, the outdoor theme park will run for 10 hours a day. That said, Genting Malaysia stated that the outdoor theme park could run for longer during weekends and anniversaries going forward.”

In other developments, Bloomberg reported on Sunday – citing public information from a sales agent – that a so-called “super yacht” purchased by Genting Malaysia six months ago for US$126 million, was being listed to sale again with an asking price of US$200 million; nearly 60 percent more.

The 300-foot (91-metre) vessel was once owned by financier Low Taek Jho, who was implicated in a major financial scandal connected to Malaysian sovereign wealth fund 1MBD. The yacht was formerly known as ‘Equanimity’ and is now named ‘Tranquility’.