INVESTMENT HIGHLIGHTS

• Visited Genting Highlands Premium Outlets (GHPO)

• Positive on GHPO prospect

• Genting Simon profit contribution at 6.6% to GENP

• Earnings estimate maintained

• Maintain BUY with TP of RM12.00

Visited Genting Highlands Premium Outlets (GHPO). We recently visited Genting Highlands Premium Outlets (GHPO) which is a 50:50 joint venture (JV) between Genting Plantations (GENP) and Simon Property Group (SPG). Recall that GHPO is Malaysia’s second premium outlet after Johor Premium Outlets and it opened its doors to the public on 15 June 2017. GHPO sits on 350,000 square feet of land with Net Lettable Area (NLA) of 270,000 square feet. It has more than 150 designers and brand name stores offering savings of up to 70%.

Positive on GHPO prospect. We returned from the trip feeling positive on GHPO prospect as we gather that it has achieved 99% occupancy rate. There is also a potential for expansion as GHPO still has land for expansion. Based on the good footfall and high occupancy rate, we believe that GHPO may start Phase 2 expansion in either 2020 or 2021.

Genting Simon profit contribution at 6.6% to GENP. In FY17, Genting Simon contributed Profit Before Tax of RM30.3m (or 6.6% of GENP PBT). This is a significant improvement of 44% yoy. Note that Genting Simon PBT includes the profit from both GHPO and Johor Premium Outlets.

Earnings estimate maintained. We maintain our FY18 CNI forecast of RM346m. We also maintain our FY19 CNI forecast of RM379m. Our earnings estimates are maintained as the information that we gather has been factored in previously.

Maintain BUY with TP of RM12.00. Our TP is based on Sum Of Parts (Refer Page 2). We like the Company as we expect its FFB growth of 13% yoy to be the strongest among planters under our coverage. This is due to new contribution from recently acquired estate of 12,893 ha and 5000 ha coming to maturity in Indonesia. In 1QFY18, GENP FFB volume has grown by 20%yoy to 485,510 tonnes.

Source: MIDF Research - 25 Apr 2018