Genting in the running in India?

KUALA LUMPUR: Even as investors turn more upbeat on Genting Malaysia Bhd following the earnings boost from its upcoming New York racino opening, there is speculation the Genting Group is among those eyeing a US$2.1 billion (RM6.3 billion) mega theme park project in Gujarat, India.

According to The Economic Times of India, the Genting Group is one of several world leading theme park operators in talks to set up a Disneyland-style amusement park at Suvali Beach in Gujarat — one that may be bigger than the Tokyo Disneyland or even Walt Disney World in Florida.

Quoting unnamed sources, the project developed by Mumbai-based infrastructure and real estate firm Atlanta, is said to have been given the go-ahead by the Gujarat Tourism Department.

Ernst & Young has done the market research and financial modelling for the project, while the concept plan has been prepared by architecture and design firm, Morphogenesis, the report said.

The 13 sq km site at Suvali Beach with a 3.3km coastline, located some 20km from Surat, will have five theme parks — a nature park, amusement park, water park, beach park, ice skating and skiing dome — as well as restaurants, hotels, studios, forest villas, beach villas, studio lagoon and apartments, the report said.

Disney is not to be part of the picture, though. "While India is an attractive market, at this time, we have no further plans for this region," a Disney spokesperson was quoted as saying in the same report.

Genting Malaysia's stock continued its uptrend on Thursday, July 7, even as rumour mills continued to speculate the group sealing a RM2 billion to RM2.5 billion deal to buy billionaire Ananda Krishnan's numbers forecast operator Pan Malaysian Pools, which went private when Tanjong plc was privatised.

RHB Research Institute yesterday told clients in a report the upcoming opening of Resorts World New York on Oct 1 would be one of the main catalysts for a re-rating of Genting Malaysia as news flow starts to become more forthcoming and the reality of the project's earnings potential becomes clearer to investors.

"We believe that could result in earnings upgrades for the stock and valuations would therefore look more attractive. As it is, Genting Malaysia continues to trade at a huge 30%-40% discount to its regional peers," RHB said.

Its parent Genting Bhd would continue to be a beneficiary of Genting Singapore Ltd's growing profits. It also stands to benefit from earnings in the plantation division as well as longer-term potential upside from Genting Malaysia's new projects. RHB sees Genting as the cheaper entry to Genting Singapore.

RHB has an "outperform" recommendation on Genting with a RM13.30 fair value but is "neutral" on Genting Singapore with a S$2.15 (RM5.29) target price as it reckons the Singapore operator may only see a re-rating when phase 2 of its expansion is ready by year-end. Genting Malaysia — being the entity with the most underutilised cashpile (RM2.8 billion as at end-1Q11) to support its aggressive expansion in the US and the UK — is RHB's top pick for the sector. It values Genting Malaysia at RM4.40 apiece. That implies a 14% upside potential from Thursday's RM3.86 close.

Genting closed 16 sen lower at RM11.10 on Thursday while Genting Singapore ended one cent lower at S$1.89.