KUALA LUMPUR: Shares of Genting Malaysia fell at mid-afternoon on Thursday after its unit RW Orange Country LCC failed to win a casino licence in upstate New York (NY).
At 3.28pm, its shares fell 16 sen to RM3.91 with some 7.13 million shares traded between RM3.89 and RM4.03.
The FBM KLCI rose 21.09 points to 1,702.99. Turnover was 1.415 billion shares valued at RM1.16bil. There were 711 gainers, 171 decliners and 173 counters unchanged.
CIMB Research said on Thursday that the NY state board chose three developers that excluded any bids in Orange and Ulster counties.
“Both of Genting Malaysia’s bids were located in Orange county. While we are disappointed by the decision, Genting Malaysia’s remains an Add as valuations remain compelling.
“Our RNAV-based target price is lowered as we remove our 39 sen RNAV estimate from NY. The share price is unlikely to react negatively as consensus had not imputed any contribution from NY,” it said.
CIMB Research said potential re-rating catalysts are the opening of the theme park ahead of expectation and additional table capacity in Genting Highlands.
However, the research house said investors should stay invested in Genting Malaysia.
Investors can still look forward to the opening of 1) the new 20th Century Fox theme park. Our channel checks suggest that it is likely to open in early 2016; 2) Sky Avenue and Plaza in 2016; 3) Genting Premium Outlets in Awana in late 2015; and 4) new gaming capacity in tandem with the expansion in hotel rooms.
At the current share price, investors are receiving Genting UK, Genting NY, Genting HK and Genting Malaysia’s net cash for free.
"Genting Malaysia remains our top pick in the gaming sector," it said.
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