PETALING JAYA: Genting Plantations Bhd ’s joint-venture (JV) entity, Genting Simon Sdn Bhd, could double its profit contribution to the former due to the opening of Genting Highlands Premium Outlet (GPO), according to CIMB Research.
This is the group’s second premium outlet via its 50:50 JV with Simon Property Group, after Johor Premium Outlet (JPO), which was opened in 2011.
“We expect GPO to do well in view of its strategic location and our projections of stronger visitor arrivals to Genting Highlands, when the new theme park opens.
“We also noted significant construction progress at the theme park site and estimate Genting Plantations’ share of profit from Genting Simon could double in the coming years
“We are positive on this development as we expect the second outlet to contribute positively to the group’s future earnings in view of its strategic location and our expectations for visitor arrivals to pick up when the 20th Century Fox outdoor theme park opens in the first half of 2018.
“We also took the opportunity to grab a cable car ride to view the site of the theme park and were pleasantly surprised by the significant progress made since our last visit around two and a half months ago,” said CIMB Research in a recent report.
Over the past five years, the group’s 50% stake in Genting Simon has contributed handsomely to the group.
“Our analysis revealed that Genting Plantations’ share of profit from this joint venture has grown from RM1.1mil in 2011 to RM21.1mil in 2016, making up around 4% of the group’s financial year 2016 pretax profit.
“We believe there is potential to double future earnings contribution from this division following the opening of GPO,” said CIMB Research.
The opening of GPO also marks another key milestone for the Genting Integrated Tourism Plan (GITP) project.
GPO is located near the Awana Resort and Golf Course, which is a little more than half way up to Genting Highlands.
The travelling time to the GPO from KLCC is around 45 minutes.
The proposed GPO was first revealed to the public (though at conceptual stage) when the Prime Minister launched the Genting Integrated Tourism Plan and Twentieth Century Fox World in December 2013.
“We were overall impressed by the layout and enjoyed our maiden shopping experience at the outlet, due to the good deals and cooling weather as the outlet is located close to the hilltop.
“We gathered that 80% of the 150 outlets have opened for business and our broad observation revealed that the outlets are well stocked even though it was the first day of opening,” said CIMB Research.
Some of the brands at GPO are Kate Spade NY, Hugo Boss, Michael Kors, Polo Ralph Lauren, Aigner, Furla, Tumi, Coach, Nike and Adidas.