KUALA LUMPUR (April 23): CIMB Research is confident that Komtar’s makeover will boost Only World Group Bhd (OWG) revenue.
According to a CIMB Research report on April 22, Komtar would be a themed attractions-based destination, doubling its current net lettable area (NLA) and the space will be fully taken up by end-2015.
“We raise our financial year ending June 30, 2016 (FY16) and FY 17 earnings per share (EPS) forecasts by 12% to 18% to reflect higher rental revenue from the Komtar space and higher projected revenue from the observation desk on level 64.”
The research house believes that the Komtar revitalisation project will be a success.
“As a tourist destination offering themed attractions, a high-rise observation deck and a sky bar and dining under a single roof. Komtar will be another captive market business in addition to Genting Highlands, we believe.”
As Penang averages five to six million in tourist arrivals annually, CIMB Research believes that management’s target of one million visitors is conservative and achievable.
“We raise our observation deck visitor estimate from 600,000 to one million at unchanged blended revenue of RM15 per visitor, which is conservative as management expects to price the tickets at a higher rate.”
In the longer term, Penang’s light rail transit and cable car projects will further drive tourist traffic to Penang and Komtar, the research house added. .” CIMB Research’s report also appeared in The Edge Financial Daily today.
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