The current management is particularly weak in corporate finance and taxation.

This is visible from the super high taxation rate of 45.4% in Q4 2022, and unbelievably high cash tax rate of 62.7% in 2022. Just imagine, for RM211.4 million of pretax profit registered for 2022, AEON paid cash tax of RM132.5 million. I checked with AEON public relation officer and the reply was that the high taxation rate was due to cukai makmur and some disallowed items for tax deduction. That simply did not explain a thing.

The company accounting team has allowed the lease liabilities to balloon to a whopping RM1.612 billion, almost reaching 90% of total equity of RM1.80 billion. The reply from the company was that these lease liabilities are capitalised long term leases from third party shopping malls. They charged out total RM258.7 million of lease liability interests and payments into cashflows statements in 2022. This implies an averaged 6 year of leases being capitalised. One would question why they need to capitalise so much of such lease liabilities and whether such practice has unintentionally increased the cash tax payments to the taxman while increasing the accounting profits.

i3lucker

Your point on AEON having reduced issue of shoplifting compared to the old Carrefour may be right, but we should not overlook the other shortcomings of the current AEON management.

The utmost responsibility of the management of a listed company is to safeguard shareholders' interests and manage the company well to create more value for the shareholders. Otherwise why bother with listing?

The current management seems to have focused on the wrong things without clear strategy on how to expand and improve earnings.

They have spent millions of dollars on digital transformation which has obviously yielded little result (note online revenue was only RM24m for 2022, not even 1% of the annual revenue). Though it may have incorporated and digitised data from hundreds of suppliers but this has not transformed into any apparent saving in bulk purchase. Total revenue may have increased by 6% in Q4 but earnings fell over 60% from last year.

The management has not got the maintenance and expenses in check, allowing it to eat into the profit (net profit fell 65% from Q4 2021) as well as cashflows (capex has doubled to over RM110 million in 2022 compared to RM65m in 2021).

They have replaced a local good capable MD in Samsuddin with 3 Japanese (1 MD and 2 deputy MDs), obviously the salary and remuneration package is different for these 3 expats, and they seem to be irreplaceable (one of them is the son of AEON founder) and are here to stay for years.

They may not be well verse with the local retails market and hence the strategy being implemented has resulted in much higher expenses and lower profits.

The only saving grace is a final 4.0 sen dividend, which can support a share price of RM0.70.

Operating cashflows are still strong but a lot were spent on high maintenance costs, high lease liabilities and useless promotional activities

I will stop following this company until a change in the management to the better.

disastrous performance in Q4, super high tax rates, high lease liabilities payments, non-responsive management, lousy finance and tax department, high maintenance costs, and costly promotional activities that yielded no result.

The business and brandname itself is good, but the local management team is lousy. Can't help it.

Genting under heavy selling but Genm is relatively steady, meaning that it should not be a new gaming tax that causes the selling.

Genting Singapore share price is steady and Q4 earnings are good, so it is not due to GenS.

The only things left in Genting Bhd but not in Genm are Resorts World Las Vegas and TauRx.
I suspect the worry of further US interest rate hikes to drag RWLV into losses may be the culprit.

I think it should be calculated this way:

2.82c x 12,094 million x 52.7% x 3.20 = RM613 million to Genting Bhd

In Genting's quarterly reports, it consolidates the 100% earnings from GenS and GenM at EBITDA and PBT level, then minus off non-controlling interests, so the effect is the same

@neoths, yes CASH is king, and operating cashflows are important

CIMB analyst in his report dated 14th Feb 2023 on Genm forecast a Q4 EBITDA of RM640-680 million for Genm with US operations contributing EBITDA of RM120-130 million.
Minus off forecast interest costs of RM130 million per quarter, operating cashflows may come to RM530 million in Q4 for Genm, or 9.5 sen per share. With over RM1.0 billion of operating cashflows forecast for 2022, Genm will be comfortable to declare a final dividend of 9 sen per share.
Note that Genm has so far declared interim dividends of 6.0 sen per share, so a final dividend of 9.0 sen will bring full year dividend to 15 sen, in line with CIMB projection

Short term share price movements are hard to explain and easily manipulated by all sorts of parties.

But numbers never lie. Genting Singapore latest Q4 numbers speak loud and clear about the impending rebounds in earnings and cashflows in Singapore. A simple calculation will reveal that a new gaming tax would be of no use to the government. Empire Resorts have turned around with positive EBITDA though short term interest costs may drag it into a small loss.

There are plenty of catalysts around for Genting Bhd, but each takes time such as getting authority approval for TauRx's Alzheimer treatment drug, New York new casino license solicitation process, rebounds in foreign visitors to Singapore and Malaysia after China re-opened borders on 8th Jan 2023, a potential US listing for RWLV and Empire Resorts etc.

@dompeilee, I am also struggling to understand the selldown last Friday. It could be a combination of everything:
- profit taking after a good run-up from RM4.46 to 5.10
- the rumuor of additional gaming tax, and prosperity tax
- a weak quarterly result from Genting Singapore (after Marina Bay Sands reported a 10% drop in earnings in Q4 vs Q3)
- a potential play by call warrant issuer to depress the share price ahead of expiry date
- potential further interest rate hikes in the US

True that Empire Resorts may not be a good investment so far for Genm, but things will change when it manages to get one of the full casino license later this year.

Empire Resorts has managed to turn around with positive operating cashflows and EBITDA of US$36 million on revenue of US$231 million in 2021.

The solicitation process for 3 full casino licenses in New York is well under way. CBRE expected that the potential gaming revenue in New York area would top US$4.8 billion a year, indicating that each full casino might achieve gaming revenue of US$1.6 billion a year.

Empire Resorts stands a good chance to win one of these full casino licenses, as it already has the facilities ready for deployment in a matter of weeks.

Based on my calculations, Empire Resorts would achieve annual revenue of US$1.5 billion in its first year of having a full casino license, and EBITDA of US$750 million and after-tax free cashflows of US$400 million a year.

With a 76.3% stake in Empire Resorts, Genm will strike a jackpot when the latter gets a full casino license, and the latest 10% stake acquisition from Kien Huat would be a blessing in disguise.

As there will be 6 state elections in 2023, so the government will avoid implementing a wide-reaching GST in 2023. But it is likely for the govn to consider it for 2024 as GST would collect far more tax revenue of RM35-40 billion a year, compared to SST tax revenue of RM12 billion and prosperity tax of RM8-10 billion a year.

An extension of the prosperity tax at 33% for 2023 would cost Genm additional tax expense of RM1.5bn x 8% = RM120 million, and about RM60 million impact to Genting Bhd or just 1.5 sen impact to the bottom line.

I think the issue of a new gaming tax has been overplayed by certain parties like CIMB. Think about it, how much tax revenue could the government collect from such a gaming tax??

Genm expects to achieve pretax profit of RM1.5 billion in 2023, a 10% gaming tax would collect a tiny RM150 million of tax revenue, it wouldn't make a difference to the government.

Even a 50% gaming tax would collect just RM750 million, not adding much to government coffer.

I think an extension of the prosperity tax for one more year in 2023 would be more likely as it will add some RM8 billion to RM10 billion additional tax revenue to the government, which would be sizable.

Now that the company has announced to further spread out the RWS 2.0 expansion project to 2028. So far the company has only announced plans to add Minions Land in Universal Studios and expand the Acquarium with a total investment of S$400 million to be spent in 2022-2023.

We shall wait for other plans from the company later this year or next to gauge its capex plan and potential earnings enhancement then.

Genting Singapore operating cashflows for 2022 amounted to S$806.68 million with EBITDA of S$774.2 million.

Most analysts (like Maybank, CIMB, UOB) expect Genting Singapore to achieve EBITDA of S$1,050-1,100 million in 2023, hence operating cashflows will increase by S$300m to S$1.1 billion in 2023.

If setting aside S$360m for 3 sen dividend in 2023, Genting Singapore will still have almost S$750 million of operating cashflows to fund the capex which is expected to be S$300-400m in 2023.

The other taxes mentioned by the analyst like capital gain tax and inheritance tax would have far larger repercussion to the country long term competitiveness. Lots of international corporations and wealthy people would shift their investment and money away from Malaysia if any such tax is implemented.

It is all nonsensical speculation.

I think the issue of gaming tax has been over-played by certain parties and analysts like CIMB. Think about it, how much tax revenue could the government collect from an additional gaming tax??

Genm expected pretax profit for 2023 may come to RM1.5 billion. A 10% gaming tax would give the government a tiny RM150m tax revenue, wouldn't help a thing to the government.

Even a 50% gaming tax would just collect RM750 million.

I think an extension of the prosperity tax would be more likely as it would give the government some RM8.0 billion to RM10 billion additional tax revenue for 2023, before it rolls out GST again next year.

Genting Singapore declares 2 sen final dividend will contribute 12,094m x 52.7% x S$0.02 = S$127.5 million or RM408 million cash to Genting Bhd

Genting Malaysia expects to declare a final dividend of 10 sen per share and will contribute 5,653m x 50.1% x RM0.10 = RM283.2 million to Genting Bhd

These 2 final dividends will total RM691.2 million or 17.8 sen per share to Genting Bhd who will be able to declare a final dividend of 15 sen at least

Superb quarterly results!!

MBMR is indeed a cash cow

With Chinese tourists coming in and Singapore borders fully re-opened, I am confident that Genting Singapore will scale new highs in terms of visitation to its Sentosa IR as well as earnings.

2023 EBITDA is projected to increase by 30%-40%, in line with Singapore tourism board's projected 100% increase in foreign visitors to 12 - 14 million in 2023 compared to 6.5 million in 2022.

Genting Singapore reported a good set of Q4 results with EBITDA coming at S$255 million, slightly better than Q3 S$249 million.

Operating cashflows for full year 2022 were super strong at S$806.68 million. Cash holdings increased to S$3.464 billion as of 31 Dec 2022.

ya we need to see for at least another 2 quarters of results of Genting and Genting Singapore. One quarter of result for 4Q itself will not speak much.

In fact, I am looking at past 10-15 year performance to be able to judge for how much it may recover.

I can understand your sentiment as Genting share dropped big today. There could be plenty of reasons for the drop today such as a potential gaming tax to be tabled in the upcoming budget as speculated by some, or an extension of the prosperity tax or simply manipulation of the share price by some parties for different agenda.

None of this relates to the fundamentals of the company. Of course, Malaysia stock market also suffers from low participation of foreign funds, hence the current depressed level.

But Genting Singapore does not have any of such issue and its share price went up today. It should continue to re-rate upwards and sooner or later Genting share price will follow suit.

As for the sharp drop of Genting share price today on heavy volume, I am not too sure why it happened so.

It all started to happen when AI said the government would not implement GST in 2023, then all sorts of analysts and economists started to chip in and talk about other tax avenues for the government to increase its tax revenue, such as an extension of the prosperity tax, inheritance tax, tax on dividend, capital gain tax etc as written by a CIMB analyst.

From another angle, there are 2 call warrants issued by CIMB on Genm and Genting expiring end of this month. Perhaps the issuing bank is doing some tricks so as to settle these call warrants at zero value.

But again, share price movements on any given day is too hard to predict or explain. At the end of the day, fundamentals prevail.

@dompeilee, you don't have to trust me, just trust the numbers and do your own analysis and judgement.

When I wrote my 1st article on Genting Bhd, it was trading at RM4.46. It went on to rally to a high of RM5.10 or 14% gain.

My target price for Genting was set based on my reasonable valuation of its various subsidiaries, and a lot of value needs to be unlocked from Resorts World Las Vegas through a US listing, from Empire Resorts once it wins a full-fledged casino license in New York, and from TauRx when it gets approval progressively from the authorities in the US, UK, Canada and Europe.

Even before it unlocks the massive value in these entities, its stakes in Genting Singapore is already worth more than its entire market capitalisation. Furthermore, Genting Singapore itself is grossly undervalued compared to regional peers.

Enough is said and everybody knows Genting is undervalued and it really depends on the management how to unlock them at the right time. We just need to have the patience for them to do the right things and for the various subsidiaries to pursue interests in own areas. Each of these takes time, eg. New York casino license tender will take several months and TauRx may need time to talk to the various authorities in different countries.

maybe for another 1 week

Wow Moody expects Genting to achieve record EBITDA of RM8.9 billion for the 12 months to Sept 2023, from RM7.0 billion a year ago. There won't be much capex to be spent in Malaysia and the US, maybe some S$300-500 million capex to expand Genting Singapore Sentosa 2.0. Minus RM1.4b for interest expenses and RM1.0b for cash tax, free cashflows may come to RM8.9b - RM1.4b - RM1.0b - RM1.5b = RM5.0 billion minimum.

Moody’s revises Genting and subsidiaries’ outlook to ‘stable’ amid continued recovery in leisure and hospitality biz

theedgemarkets.com

February 13, 2023 17:28 pm +08

https://www.theedgemarkets.com/node/655021

True that Malaysia share market is suffering from huge discounts due to lack of interests from foreign funds as they are still observing the political development here after GE15.

Singapore has no such issue, and hence Genting Singapore may get re-rated faster than Genting here. It is ridiculous for Genting Singapore to trade at such a big discount to its Macau peers (7x EV/EBITDA compared to 24x for Macau peers). I strongly believe Genting Singapore will run up very soon to close the gap.

As Genting Singapore shares run up, Genting will follow as it owns more than 50% in Genting Singapore. I also do not believe Genting will need to dispose all of its shares in Genting Singapore in order to reflect its value in the latter, as Genting Singapore itself is publicly traded, analysts can just use its market cap to calculate the value contribution to Genting Bhd.

Furthermore, Genting may just dispose of a small stake (~10% to 15%) or get Genting Singapore to issue new shares to a potential suitor like MGM to get a strategic tie-up with another prominent gaming group, and to raise funds for itself and Genting Singapore. Then the market can see the value in Genting Singapore and Genting will not trade at such a big discount anymore.

I think the PAS influence from past GE has been overplayed. It was a pure political act for Kedah PAs state government to ban the 4D business in the state after they lost the federal election. They knew very well that the 4D business in Kedah and Perlis actually contributed very little to the 4D companies (<4% of total national), and the impact to the companies is very little.

When PAS was in power together with PN, they actually relaxed rules for the gaming sector by allowing a record 22 special draws in 2021 before Ismal Sabri govn reduced it to 11 in 2022 and further to 8 by the unity govn.

I do not think Genting casino licence in the highland would be at risk even though PAS would ever come back to federal power, they would need political funding too. Furthermore, Genting Highlands has become an integrated resort with themed parks, hotels, restaurants, shopping malls, Premium Outlets. You can see easily now there are plenty of Malay tourists to the highland than ever.

These funds have been so patient to accumulate below 5.10. Once the next resistance of 5.15 is taken out, it will fly.

rerating very soon together with GenS

https://klse.i3investor.com/web/blog/detail/dragon328/2023-02-09-story-h-299096494-Genting_More_than_just_Roulettes_and_Fun_Rides_in_Singapore

take a look at the parent company

https://klse.i3investor.com/web/blog/detail/dragon328/2023-02-09-story-h-299096494-Genting_More_than_just_Roulettes_and_Fun_Rides_in_Singapore

https://klse.i3investor.com/web/blog/detail/dragon328/2023-02-09-story-h-299096494-Genting_More_than_just_Roulettes_and_Fun_Rides_in_Singapore

Accumulating phase, rerating soon

tonywong8, the acquisition of Tuaspring power plant from Hyflux has been completed and it is already in operation contributing to the increased power generation to PowerSeraya

The trial export of 100MW power to Singapore has just started for 1 year.

The bigger block of power export is under a new tender called by Singapore government for up to 4,000MW by 2035.

I think it is one income stream from the provision of both the data centre and solar power, it is an integrated facility. Such income stream will be substantial and steady for many years to come, without any fuel cost risk.

The export of power to Singapore is a separate stream of income altogether.

A project IRR of 10% will see first year concession fee at RM155 million rising to RM226 million in year 20.

For the first 48MW green data centre project, the secured financing was RM1.1 billion. Assuming 75% gearing ratio, total project cost may come to RM1.5 billion.

A project IRR of 8% for a 20-year concession will see gross revenue of RM132 million in first year stepping up to RM192 million in year 20.

When the green data centre park is fully developed with 500MW capacity, then total gross revenue will rise 10 folds from above projections.

As I understand it, this data centre business is more like a concession where YTLPower spends the capex to build the data centre and solar power farm that powers up the data centre, data centre owners like SEA Group will pay back YTLPower through concession charges over 10-20 years. In a way, this is quite similar to an IPP business.

Whether it is VT pumping it up again and then dumping it later, or whether it is the case of more smart money buying up SEM due to its strong growth prospects and deep value in the pharmacy chains, it doesn't really matter.

The fact is that the share price has gone up by 30% since I made a call again to buy at around RM1.60-1.65 one month ago.

My advice is that do not let past experience or your emotion control you, but try to make objective judgement. Why did he let SEM do the company buyback to the max 10%? and then let the share price to drop back to RM1.60 again?

Bcoz he wanted to accumulate more shares below RM2.00 with his own acct and BJLand. Why he continues buying up to RM2.07 now? He definitely sees huge upsides ahead simply he is the major shareholders and he knows well before anyone else how the company was doing for the Dec 2022 quarter, and how the negotiation for disposal of Caring Pharmacy is going.
Whether he will dump the shares later is anybody's guess. To me, I see no reason for him to dump the share price again if he manages to accumulate enough.

Don't fight the trend and don't fight with your own money.

https://www.datacenterdynamics.com/en/news/ytl-secures-256m-green-loan-for-johor-data-center/

YTLPI's green data centre park project is gaining traction, having secured the green financing for the first phase of 48MW green data centre.

YTLPI has already secured some 246MW of green data centre jobs for the Kulai park, almost half of the targeted 500MW capacity when fully developed.

https://www.datacenterdynamics.com/en/news/ytl-secures-256m-green-loan-for-johor-data-center/

YTLPI's green data centre park project is gaining traction, having secured the green financing for the first phase of 48MW green data centre.

YTLPI has already secured some 246MW of green data centre jobs for the Kulai park, almost half of the targeted 500MW capacity when fully developed.

RAM mentioned about the strong operating cashflows of YTL Power, and the group has substantial RM6.83 billion of unencumbered cash reserves under YTLPI and a RM742.37 million cash balance at company level.

This reaffirms my earlier estimate of a nett cash position in YTLPI.

https://www.ram.com.my/pressrelease/?prviewid=6226

RAM upgraded credit rating for YTL Power to stable outlook

The rating affirmation on MCement by RAM is well expected as MCement is in a much stronger position now after incorporating the cement business of YTL Cement, which collectively control 65% of the cement market in Peninsular.

With minimum capex going forward but strong operating cashflows, MCement will be able to pare down debts quickly or pay high dividends to its parent YTL Corp. With its credit rating reaffirmed by RAM now, MCement will choose to dividend out more once satisfying the debt cover ratio.

touch RM2.00 first target. Next RM2.40

wow hng33 is sharp

Good gain by MCement today

Aggressive selling by EPF continues. May have chance to add more towards 0.50