Journey to Wealth
Genting Malaysia - NCL files for IPO again Buy
- According to Bloomberg, Norwegian Cruise Lines (NCL), which is 50%-owned by Genting Hong Kong Ltd, has filed for an initial public offering (IPO).
- Genting Hong Kong used to own 100% of NCL before selling a 50% stake to Apollo Global Management and TPG in 2008.
- NCL's previous filing for an IPO in 2010 was scrapped.
- Genting Hong Kong is estimated to be 18.8%-owned by Genting Malaysia Bhd (GenM).
- NCL is expected to raise proceeds of US$424mil, which would be used to repay borrowings. According to Bloomberg, NCL would be offering about 12% of its shares in the IPO.
- Based on the market capitalisation of US$3.5bil and NCL's annualised FY12F net profit of US$223mil, NCL's FY12F PE would be roughly 15.8x.
- In comparison, Royal Caribbean and Carnival Corp's FY12F PEs are between 18x and 20x. The two cruise companies' PEs are expected to decline to 13x to 15x in FY13F.
- NCL reported a net profit of US$167.5mil in 9MFY12 on the back of revenue of US$1.7bil. EBITDA margin was at 26% in 9MFY12 versus 24% in 9MFY11.
- There is no impact on GenM as its shareholding in Genting Hong Kong is only an investment stake. GenM does not even equity-account Genting Hong Kong's earnings.
- However, the listing of NCL would give a market value to NCL's assets.
- The listing would allow Genting Hong Kong an option to sell its shares in NCL in the open market, if it chooses to.
- We maintain a BUY recommendation on GenM for its resilient gaming earnings in Malaysia and New York. GenM's risk comes in the form of volatile earnings in its UK gaming division.
Source: AmeSecurities
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
