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GENM: Genting Malaysia Berhad - thestockmonger
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Genting Malaysia Berhad (GENM) is a renowned resort operator that engages in gaming, hotel, and entertainment. It has operation in Malaysia, US, Bahamas, UK and Egypt.
Key Properties
|
Country |
Property |
Occupancy Rate |
Detail |
|
Malaysia |
Resort World Genting |
97% |
Approx. 10,500 rooms of various themes across 6 hilltop hotels. In addition to an indoor theme park, dining and retail outlets and others. |
|
Resort World Kijal |
34% |
Seaside Resort in Terengganu |
|
|
Resort World Langkawi |
64% |
Seaside Resort in Langkawi |
|
|
United State |
Resort World Casino New York City
|
– |
The only casino in New York City, offering over 6,000 slots and electronic table games. |
|
|
Hilton Miami Downtown |
79% |
A 527-room hotel that sits on 30acres of prime freehold waterfront land |
|
Bahamas |
Resort World Bimini |
48% |
Features The Hilton hotel, a casino, restaurants and bars along with various amenities. |
|
United Kingdom |
Resort World Birmingham |
80% |
The first integrated leisure complex that offers gaming and entertainment facilities, retail and dining outlets and a 178-room four star hotel |
|
|
Over 40 casinos |
– |
No additional detail provided except the group is the largest casino operator in UK |
|
Middle East (Egypt) |
Crockfords Cairo |
– |
An independent casino operating inside the Nile Ritz-Carlton Hotel.* |
*Genting Malaysia Berhad does not own the Nile Ritz-Carlton Hotel
Note: There’s actually a lot more subsidiaries, companies, properties owned by Genting Malaysia Berhad. But these are the ones highlighted in the Annual Report, so we’ll focus on these. To see the full lists of properties under Genting Malaysia Berhad, look at page 166 of the 2018 Annual Report.
Income Statement
|
Financial Year |
12/31/2018 |
12/31/2017 |
12/31/2016 |
12/31/2015 |
12/31/2014 |
|
Sales/Revenue |
9,927,600 |
9,328,700 |
8,931,600 |
8,395,900 |
8,229,400 |
|
Net Income Available to Common |
– 19,500 |
1,159,700 |
2,880,100 |
1,257,900 |
1,188,700 |
|
Profit Margin |
-0.20% |
12.43% |
32.25% |
14.98% |
14.44% |
Revenue has increased consistently over the past 5 years. The group gave credits to higher business volume and new attractions for their improved revenue in FY2018. However, revenue in the US and Bahamas was lowered due to weaker USD exchange rate to RM.
However, Genting Malaysia recorded a net loss of RM 19.5 million due to the impairment loss in relation to the group’s investment in promissory notes issued by the Tribe. The impairment loss was due to the uncertainties of the reaffirmation of the Tribe’s land in trust status. This impairment loss may be reversed if and when the Tribe’s land rights are secured. If the impairment loss was excluded, the net profit attributable to shareholders would be RM1.81 billion, a 56% increase compared to FY2017.
It is worth noting that net profit saw a huge jump in FY2016 due to a one off gain from the disposal of the group’s equity investment in Genting Hong Kong Limited. Other than that, Genting Malaysia’s net profit maintain slightly above the RM 1 billion mark.
Balance Sheet
|
Financial Year |
12/31/2018 |
12/31/2017 |
12/31/2016 |
12/31/2015 |
12/31/2014 |
|
Cash & Short-Term Investments |
8,508,400 |
6,195,600 |
5,451,500 |
5,157,800 |
4,062,700 |
|
Total Current Assets |
9,338,900 |
7,059,100 |
6,129,200 |
8,541,300 |
4,980,500 |
|
Total Non-Current Assets |
22,379,000 |
22,909,300 |
21,765,200 |
18,979,500 |
15,816,700 |
|
Total Assets |
31,717,900 |
29,968,400 |
27,894,400 |
27,520,800 |
20,797,200 |
|
Total Debt |
9,760,300 |
6,974,400 |
4,326,600 |
4,624,900 |
1,618,200 |
|
Total Current Liabilities |
3,383,400 |
3,252,000 |
4,031,700 |
3,666,600 |
2,252,600 |
|
Total Non-Current Liabilities |
10,381,200 |
7,574,600 |
4,117,300 |
4,747,800 |
2,270,900 |
|
Total Liabilities |
13,764,600 |
10,826,600 |
8,149,000 |
8,414,400 |
4,523,500 |
|
Shareholder’s Equity |
17,953,300 |
19,141,800 |
19,745,400 |
19,106,400 |
16,273,700 |
Genting Malaysia has increased its cash and cash equivalent from RM 6 billion to RM8 billion. The increase was due to the receipt of the proceeds from MTN of RM2.6 billion and a net cash inflow of RM2.61 billion from operating activities in 2018.
At the same time, the group’s borrowing increased to RM 9.8 billion due to the issuance of MTN of RM 2.6 billion.
At 31st December 2018, the group’s gearing ratio is 35% compared to 27% the same time last year. The increase was due to the issuance of MTN in July 2018.
Future Prospect
In 2013, Genting Malaysia Berhad started Genting Integrated Tourism Plan (GITP), a 10 year master plan to transform Resort World Genting.
In Malaysia, the group completed the roll out of the Skytropolis Funland Indoor themepark in December 2018. The group is putting their focus on their outdoor theme park as a growth initiative in Malaysia.
Other than that, the group has plans to put more effort in marketing their attractions all over the globe
Financial Ratios
|
Financial Year |
12/31/2018 |
12/31/2017 |
12/31/2016 |
12/31/2015 |
12/31/2014 |
|
ROE |
-0.10% |
5.92% |
14.79% |
7.11% |
7.48% |
|
EPS |
-0.35 |
20.51 |
50.94 |
22.25 |
21.03 |
|
DPS |
19.00 |
17.00 |
16.50 |
7.10 |
6.50 |
|
Book Value |
2.31 |
2.47 |
2.50 |
2.31 |
1.99 |
ROE has maintained at 5% – 7% over the past 5 years, assuming we don’t include the one-off gain in 2016. If the impairment loss did not happen in FY2018, the ROE should be around 10% level. Therefore, Genting Malaysia has an inconsistent track record of ROE.
EPS is also inconsistent at best, the group’s EPS hovers above 20 sen level.
However, the group is consistent in increasing DPS to its shareholder over the past 5 years.
Valuation
|
Current Price |
3.06 |
|
Dividend Yield |
6.21% |
|
P/E Ratio |
-874.29 |
|
P/B Ratio |
1.32 |
At the time of writing, the share price is RM3.06 while dividend yield is at 6.21%. P/E ratio is not relevant at this time because GENM made losses this year. GENM is currently selling at 1.32 times of its book value.
What I Like and Don't Like About The Company
What I Like
- Casino monopoly in Malaysia
- Increasing DPS
- Good branding in Malaysia
- Consistent increase in Revenue
What I don’t like
- Low ROE
- Very hard to analyse because it has so many properties.
- Inconsistent profits
https://thestockmonger.com/genm/
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Musang King
This impairment loss may be reversed if and when the Tribe’s land rights are secured. If the impairment loss was excluded, the net profit attributable to shareholders would be RM1.81 billion, a 56% increase compared to FY2017. Miracle to get back the Tribe's land rights is possible through negotiations and prayers. If this is made possible, GenM shares will be back to above RM5.00 a share. Prayers __/\__ __/\__ __/\__.
2019-09-25 16:29