Genting Malaysia share price continues to rise


According to UOB Kay Hian Research, the increased interest in the stock in recent weeks could be related to speculation that the group had reached a compromise with 20th Century Fox, paving the way for the opening of its outdoor theme park.

PETALING JAYA: The steady rise in Genting Malaysia Bhd’s share price in recent weeks is linked to market speculation that its outdoor theme park will be opening its doors to visitors sooner than expected, analysts say.

Genting Malaysia has climbed some 20% since May 28, closing up 25 sen to RM3.70 yesterday. For the year-to-date period, the stock has risen by about 25%.

According to UOB Kay Hian Research, the increased interest in the stock in recent weeks could be related to speculation that the group had reached a compromise with 20th Century Fox, paving the way for the opening of its outdoor theme park.

“According to market speculation, both parties have reached a commercial agreement after rounds of negotiations, which could possibly result in higher royalty or revenue sharing to Fox.

“Our channel checks thus far reveal that while talks have been ongoing, there has been no confirmation that a settlement has been reached. Naturally, the company remains tight-lipped on this matter,” it said in a note.

The rise in the group’s share price this year comes after it saw heavy selling pressure during the second half of 2018, due to two significant events.

First was the announcement of higher casino duties during the tabling of Budget 2019 in September last year, which sent the stock tumbling on fears about the magnitude of its impact on the Genting group.

Later in November, 21st Century Fox and Walt Disney Co pulled out of an agreement to allow Genting Malaysia to build a theme park using the design and intellectual property rights owned by Fox Entertainment Group, LLC.

The theme park was supposed to have opened in mid-2019.

As lawsuits and counter-lawsuits were filed, Genting Malaysia decided to go ahead and build a larger outdoor theme park but the opening date was delayed.

According to reports, Genting Malaysia has invested over US$750mil (RM3.1bil) in the theme park.

While the group remains tight-lipped on the developments, UOB Kay Hian Research said a confirmation by Genting Malaysia or Fox could provide between 10% and 15% upside to its target price of RM3.40.

Maybank Investment Bank Bhd, meanwhile, has upgraded Genting Malaysia to a “buy” from a “hold”, on expectations that the group would open the outdoor theme park “a lot earlier” than anticipated.

This, it said, was based mainly on a recent full-page job advertisement for

its theme park division in local newspapers, which suggested that the attraction could be ready to open soon.

It expects the theme park could open as early as the first or second quarter of next year, which is ahead of its earlier forecast of the first quarter of 2021.

The research house, however, said it was unsure about whether the group would reconcile with Fox, partner other studios, share royalties, or operate the theme park on its own.

“We are optimistic that the outdoor theme park will drive Genting Malaysia’s next phase of earnings growth, regardless of whether it opens in first quarter 2021 as we expect, or earlier,” it said.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Genting , Malaysia , Fox , stocks , shares , rise ,

   

Next In Business News

EPCIC segments lifts Yinson's earnings, revenue higher in Q1
Serba loses almost half of its board members, boss Abdul Karim says doing his outmost best to resolve current issues
KLCI pares gains as sellers dominate
No plans to sell Subang Airport
NCER draws RM16b investments in 2021
Serba Dinamik MD: Daily operations running as usual, group revamp if needed
Economic indicators show recovery but impact of pandemic weighs
Global shares near record on US infrastructure bill
LHI to expand Baker’s Cottage to 280 outlets by end-2023
Oil rises further on tight supply outlook, eyes on OPEC+

Stories You'll Enjoy


Vouchers