PETALING JAYA: Genting Malaysia Bhd and Genting Bhd were the top gainers on Bursa Malaysia today, driven by the possible earlier-than-expected opening of Resorts World Genting’s (RWG) outdoor theme park.
Genting Malaysia surged 7.25% to close at RM3.70 with 57.67 million shares traded, while Genting rose 3.31% to close at RM6.87 on volume of 11.96 million shares.
According to Maybank IB Research, RWG’s full-page job advertisements for its theme park division in local newspapers over the last two weeks suggest that the outdoor theme park could be ready to open soon.
“We are optimistic that the outdoor theme park will drive Genting Malaysia’s next phase of earnings growth regardless of whether it opens in the first quarter of 2021 as we expect or earlier,” it said in a research note today.
The outdoor theme park, which is the subject of a US$1 billion (RM4.12 billion) lawsuit between Genting Malaysia and Fox/Disney, is about 95% complete as at July 2019.
Prior to Genting Malaysia’s fallout with Fox/Disney in November 2018, the company also took out job advertisements for 20th Century Fox World (the outdoor theme park’s original name) in May 2018.
Back then, the group said it would open 20th Century Fox World in late 2018 or early 2019, implying a lead time of six to nine months between hiring and opening.
“Applying the same lead time suggests to us that the outdoor theme park could be opened in the first or second quarter of 2020, which is much earlier than our first quarter of 2021 forecast,” said Maybank IB Research.
It upgraded Genting Malaysia to “buy” from “hold”, with a revised target price of RM3.80 from RM3.40 previously.
“At this point, we are unsure if Genting Malaysia will reconcile with Fox/Disney, partner other studios, share royalties with them or even operate the outdoor theme park on its own. Thus, we think it best to leave our earnings estimates which assume that outdoor theme park will open in the first quarter of 2021 unchanged.”
