- Genting Bhd has proposed to dispose of its 60% equity interest in Suzhou Coastal Cogeneration Power Company Ltd (SCCPC) for RMB44mil (RM22.7mil).

- SCCPC owns and operated a 107MW peaking power plant in Suzhou, China. The Suzhou Power Plant was shut down in 2008.

- It appears that Genting Bhd could be slowly selling off its power assets in China.

- Apart from Suzhou Power Plant, Genting Bhd also owns a 26.3% stake in Fujian Electric, 80% shareholding in the 76MW Nanjing Power Plant, 60% equity interest in the 42MW Wuxi Power Plant and 100% stake in the Meizhouwan Power Plant.

- Most of Genting Bhd’s power profits are generated by the 724MW Meizhouwan power plant currently.

- The gain or loss on disposal of the Suzhou Power Plant was not disclosed in the Bursa announcement. However, we reckon it is probably insignificant as the power plant is no longer in operations.

- Genting Bhd is not exiting from the power industry completely. The group is currently building a 660MW coal-fired power plant in West Java.

- The US$1bil Banten Power Plant is expected to be completed in FY16F and to start operations in FY17F.

- PERSERO, which is the Indonesian state-owned electricity company, had agreed to buy power at 5.99 US cents/KwH from Banten Power Plant. The PPA was signed back in July 2012.

- Maintain BUY on Genting Bhd for its undemanding FY14F PE valuation of 14.7x and potential earnings upside coming from “Resorts World Las Vegas”.

Source: AmeSecurities