GENM 4715 GENTING MALAYSIA BERHADa unlikely to abandon Macau ambitions, says JPMorgan
KUALA LUMPUR (Nov 29): Genting Malaysia Bhd is unlikely to abandon its Macau ambitions despite missing out on that country’s new 10-year gaming concessions, according to investment bank JPMorgan.
Citing a note detailing the potential fallout from the tender committee’s verdict, gaming industry magazine Inside Asian Gaming on Monday (Nov 28) said JPMorgan analyst DS Kim had suggested that this might not be the last investors hear of Genting Malaysia’s subsidiary GMM.
“We think they might still want to participate via equity or joint venture investment if [the] prices are right and the government is okay,” Kim wrote.
GMM was a surprise seventh bidder when tender documents were submitted on Sept 14, with Genting Malaysia stating at the time that the bid “represents an opportunity for Genting Malaysia to expand its business in the leisure and hospitality sector, diversify its geographical footprint, and participate in the recovery prospects of the Macau gaming segment”.
Instead, it was confirmed on Saturday that GMM finished seventh out of the seven bidding parties, although Macau’s tender committee has said it will not reveal the final scores until next month, presumably after the concession contracts are signed.
With the six incumbents now all but locked in to sign new 10-year concessions before year end, JPMorgan also said Macau gaming stocks are likely to receive a significant boost with the concession overhang no longer of concern.
“We think this could serve as a strong stock catalyst because many investors — especially long-only — were largely staying away from the sector given the 'tail risk'.
“This is still a ‘provisional’ licence, as the operators will now need to review and sign the contract to have it to be effective for the next 10 years, but recall that most of the contentious issues of the next licence are already addressed (such as gaming tax of 35% to 40% versus the current 39%, no explicit restrictions on dividends, very reasonable table caps and so on).
“The only known unknowns are the minimum investment requirement for the next 10 years (we estimate US$2 billion [RM9.01 billion] to US$3 billion plus per operator, with bigger operators such as Galaxy/Sands spending at the higher ends), which we expect to be fairly reasonable, and annual concession premiums (versus the current range of US$15 million to US$45 million, subject to the number of tables/slots), which we also expect to change incrementally and reasonably,” said Kim.
Kim has issued a “buy” rating for Macau gaming stocks, “not because we expect gross gaming revenue to magically recover amid the current Covid-19 situation, but we see current stock setups favourable into 2023, with low expectations, very light positioning (especially long-onlys), and cheap valuations”.
At the time of writing on Tuesday, Genting Malaysia was flat at RM2.64, with 6.86 million shares traded.
http://www.theedgemarkets.com/article/genting-malaysia-unlikely-abandon-macau-ambitions-says-jpmorgan
Singapore Investment
-
-
-
-
-
Get Smart: An Ode to Warren Buffett12 hours ago
-
-
Best fixed deposit rates in May 202512 hours ago
-
-
-
-
Podcasts16 hours ago
-
-
-
-
-
-
Dividends for Apr 2025 - Towards 5k a month20 hours ago
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
GE 2025: Aftermath6 days ago
-
-
-
Quick Updates6 days ago
-
-
-
-
-
Portfolio Summary for April 20251 week ago
-
-
-
Portfolio (April 30, 2025)1 week ago
-
Portfolio (April 30, 2025)1 week ago
-
-
-
Month of April 20251 week ago
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Gold on bullet train!3 weeks ago
-
Chinese Garden and Japanese Garden3 weeks ago
-
-
-
-
FAQ on Quantitative Investing Part 24 weeks ago
-
-
-
-
-
-
US/China/SG stocks all crashed?4 weeks ago
-
Investing vs. Speculating4 weeks ago
-
-
-
-
-
-
-
-
-
-
March 2025 Updates1 month ago
-
-
-
-
-
-
-
-
-
-
The Ultimate SG-JB Geo Arbitrage: Petrol2 months ago
-
-
-
-
-
-
ETF vs Mutual Fund: Which is Better?3 months ago
-
-
-
-
-
-
-
-
-
Arigato Everyone! A Decade of Blogging!4 months ago
-
Top 10 Highlights of 20244 months ago
-
-
2023 Trading Recap – $11,000 in profit!5 months ago
-
-
Union Square Residences6 months ago
-
-
-
STI ETF7 months ago
-
-
-
Unibet Casino Bonus Codes 20248 months ago
-
-
-
-
-
-
Monthly IBKR Update – June 202410 months ago
-
-
Portfolio Transactions (May 2024)10 months ago
-
-
-
-
-
Breakthroughs in portfolio :)11 months ago
-
-
-
Feb 2024 Expenditure1 year ago
-
-
-
-
-
-
-
Monthly Summary of November 20231 year ago
-
Migration of website1 year ago
-
-
-
-
-
-
-
-
-
A New Light2 years ago
-
-
-
-
-
-
2022 Thoughts, Hello 2023!2 years ago
-
Series of Defaults for Maple Finance2 years ago
-
Takeaways from “Sea Change”2 years ago
-
Greed is Coming Back2 years ago
-
-
-
-
-
-
-
-
What is Overemployment2 years ago
-
Terra Hill Condo (former Flynn Park)2 years ago
-
Alibaba VS Tencent: The Battle Royale2 years ago
-
-
-
-
-
-
-
-
-
-
-
-
-
Home
articles
GENM
GENM 4715 GENTING MALAYSIA BERHADa unlikely to abandon Macau ambitions, says JPMorgan