Cancellation of Fox theme park likely to affect visitor arrivals


KUALA LUMPUR: Genting Malaysia Bhd's legal case against Walt Disney Co and Twenty-First Century Fox for breach of contract with regards to the Fox theme park at Genting Highlands will likely affect visitor arrivals.

"We believe the legal proceedings will take time to conclude and in the meantime, the opening of the theme park is likely to be further delayed," said PublicInvest research.

The research house slashed its visitor arrival growth rate from 8-9% to 3% for FY19-20F resulting in a cut in earnings forecasts by 9-16%.

"We have also ascribed a lower PE multiple for the Malaysian gaming operations in our SOTP valuation (from 14x to 9x), given the uncertainties surrounding its GITP project," it said.

PublicInvest maintained underperform on the counter with a revised target price of RM2.70, from RM4 previously.

The research house said that in the event Genting Malaysia wins the legal suit and received US$1bil in compensation the Genting Integrated Tourism Plan would still be left in limbo without a key attraction.

"Seeking an alternative intellectual property licensing would be a challenge, in our opinion," it said.

PublicInvest added that there is a potential impairment risk on Genting Malaysia's investment inm promissory notes for the financing of the Mashpee Wampanoag Tribe's development of an integrated resort in the US. 

"Its total investment (including accrued interest) in the promissory notes as at June 30, 2018 amounted to USD426.3m (or RM1.8bn). The US Department of Interior is reviewing the Tribe’s rights to the land, subject to a legislation being introduced and passed in the US Congress."

Article type: metered
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Business News

Bitcoin extends downtrend, falls 12.1% to US$47,176 Premium
Perodua targets to deliver 30,000 units in December Premium
CPO futures likely to trade higher next week Premium
Georgieva says examining all IMF research processes to ensure integrity Premium
Oil steadies, paring gains as rising COVID cases spur demand worries Premium
Omicron-fuelled volatility deals hedge funds worst monthly return since March 2020 Premium
US-listed Chinese shares take a hit as Didi to exit NYSE Premium
Didi shares plunge more than 20% on plan to delist from NYSE Premium
Wall St ends lower on Omicron worries, Fed taper angst Premium
Micro impact of new variant? Premium

Others Also Read


Vouchers