GGRAsia – Year-end launch for Gen Highlands’ Sky Plaza: brokerage

Year-end launch for Gen Highlands’ Sky Plaza: brokerage

Sep 21, 2016 Newsdesk Latest News, Rest of Asia, Top of the deck

Part of the new tourism facilities planned for the Resorts World Genting casino complex in Malaysia, a property run by Genting Malaysia Bhd, is likely to have a soft opening “by year end”, said a note from Affin Hwang Investment Bank Bhd.

“We understand from management that the opening of new key facilities (new cable car system, Sky Avenue and Sky Plaza shopping mall, and multi-storey car park) with regards to the Genting Integrated Tourism Plan (GITP) is on track for a soft opening by year-end,” said Lim Tee Yang. The analyst was referring to Genting Malaysia’s name for its multibillion-U.S.-dollar revamp of the Genting Highlands resort (pictured).

“The podium, which houses additional gaming capacity, should also be ready by year-end,” said Affin Hwang in its paper, which has been distributed by brokerage Daiwa Securities Group Inc.

“We see this as a key catalyst [for Genting Malaysia] since domestic operations account for circa 80 percent of group earnings,” added Affin Hwang’s analyst, noting that a film industry-focused theme park – to be called 20th Century Fox World Malaysia – “is scheduled to open by end-2017”, a date mentioned by several investment analysts.

Japanese brokerage Nomura had said in a March report that it had been a “negative surprise” for investors that the budget for the revamp of Resorts World Genting was likely to be more than double the original MYR5-billion (US$1.2-billion) estimate.

Nomura added that the expected capital cost for the 20th Century Fox World Malaysia alone was around a quarter of the total revamped GITP budget; or MYR2 billion to MYR2.5 billion. The institution noted however that this was “not an extraordinary amount” by the standards of modern theme parks.

Affin Hwang said in its Friday note that Genting Malaysia’s United Kingdom casino operations were “likely to remain stable with tighter credit control”.

Strong U.K. results helped the group’s net profit more than double year-on-year in the second quarter, the firm announced in August.

Affin Hwang said in its note that the group’s second-half 2016 losses for Resorts World Bimini – a casino venture in the Bahamas – were likely to narrow from the US$31-million deficit posted in the first half this year. Management were working to negotiate new deals on ferry services to the Caribbean archipelago, said the institution.

“In the longer term, we see upside in the U.S. operations from the proposed US$400-million expansion of New York racino, that includes an expansion of 1,000 slot machines by April 2019,” said Affin Hwang. The institution was referring to Aqueduct Resorts World, a revamped race track run by Genting Malaysia in the New York borough of Queens. The group also developed and operates Resorts World Casino New York City.