Despite a difference of opinion between Genting Malaysia and its business associates, the show must go on. The casino operator had a falling out with the Walt Disney company and Twenty-First Century Fox after the two pulled out of a contract to build a theme park at Resorts World Genting (RWG) in 2018, but this didn’t stop Genting from pushing forward with the construction. It has apparently managed to not only keep things moving, but has done so at a record pace. The theme park at the integrated resort (IR) might open ahead of schedule and analysts are impressed.
The Kuala Lumpur IR is one of the largest in the region and Maybank Investment Bank Bhd said in a recent note that it might open “a lot earlier than we expected.” As a result, the brokerage’s analysts have lifted a 10% discount it had previously placed on the target price of Genting Malaysia’s shares.
The idea that the theme park could be opening next year, instead of 2021 as previously expected, comes from employment announcements made for the theme park. RWG has begun hiring for different positions at the property and has previously stated that the time between hiring and opening the park would be about six to nine months.
Maybank’s Samuel Yin Shao Yang states in the note, “Our revised target price is MYR3.80 [US$0.90] (MYR3.40 [$0.83] previously). Over the last two weeks, Resorts World Genting took out full-page job advertisements for its theme park division in local newspapers.”
He adds, “This suggests to us that the outdoor theme park, currently the subject of a US$1 billion lawsuit between Genting Malaysia and Fox/Disney, could be ready to open soon. We understand that construction of the outdoor theme park was approximately 95 percent completed as at July 2019.”
An earlier opening doesn’t necessarily mean revenue estimates will change. Maybank further stated that the estimates it has previously offered will stay in place and that 2021 will see approximately 2.5 million visitors at an average ticket price of around $24.28. Yin remains cautious given the litigation between Genting and Disney/Fox duo, and says, “At this point, we are unsure if Genting Malaysia will reconcile with Fox/Disney, partner other studios, share royalties with them or even operate the outdoor theme park on its own.”
