GENP
Genting Plantations Berhad
Company Background
Tourism Revival a Boon for Genting
Genting Bhd is expecting international tourism to remain strong, with continued growth driven by positive demand and the ongoing recovery in global travel.
Consequently, the operator of integrated resorts said the regional gaming market is expected to maintain its recovery momentum.
With the release of its results for the fourth quarter (4Q24) and the full year for 2024 (FY24), Genting posted a net loss of RM169.4mil, a reversal from the RM150mil profit it made in 4Q23.
Revenue also slipped 5.3% year-on-year (y-o-y) to RM6.88bil, which Genting attributed to lower income from its leisure and hospitality division.
Looking at the whole FY24, the group saw net profit dip 5% y-o-y to RM882.9mil, despite a marginal 2.2% increase in turnover to RM27.7bil.
Genting said the increase in yearly revenue was attributable mainly to the contribution from its leisure and hospitality division.
“Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of RM8.78bil for FY24 was marginally lower over the previous financial year,” it reported.
Genting said higher revenue was recorded by Resorts World Sentosa (RWS) in Singapore as the resort delivered a strong performance across both the gaming and non-gaming categories for FY24.
Although turnover had surpassed pre-pandemic levels, the group said rising costs and inflationary pressure remained significant challenges, contributing to a decline in adjusted Ebitda.
Additionally, revenue from Resorts World Genting (RWG) in FY24 was higher mainly due to an increased volume of business compared with FY23.
The leisure and hospitality businesses in the Britain and Egypt recorded higher revenue mainly due to a higher volume of business, matched by Resorts World New York City (RWNYC) and Resorts World Bimini, which also saw higher income primarily due to higher contribution from RWNYC as a result of better volume.
At the same time, Genting said its plantation division’s revenue was marginally lower in FY24, primarily attributable to lower sales in the downstream manufacturing segment, partly mitigated by higher palm product prices.
“However, adjusted Ebitda was higher on the back of stronger palm product prices. The downstream-manufacturing segment also recorded higher adjusted Ebitda in FY24 attributable to improved margins,” the group added.
Meanwhile, the group’s subsidiary Genting Malaysia Bhd (GENM) similarly saw a net loss of RM457.9mil for 4Q24, compared with a RM239.6mil net profit in 4Q23, even though revenue had stayed flattish at RM2.73bil.
GENM attributed the 4Q24 net loss to the recognition of net unrealised foreign exchange losses of RM356.9mil mainly on its US dollar denominated borrowings recorded in 4Q24 compared with net unrealised foreign exchange gains of RM130.4mil in 4Q23.
It said a higher share of losses in associates of RM13.2mil due to higher operating expenses in 4Q24 also impacted earnings during the quarter.
GENM said net profit for FY24 decreased by 42.5% y-o-y to RM251.3mil, even though turnover grew 7.1% to RM10.9bil.
It said the growth in revenue was primarily due to higher volumes of business seen in the leisure and hospitality business in Malaysia, Britain and Egypt, as well as in the United States and the Bahamas.
While posting higher y-o-y Ebitda of RM2.9bil in FY24, GENM attributed higher operating expenses, including payroll related expenses across all business segments, to the lower net earnings.
Genting declared a dividend of five sen per share for 4Q24, bringing its total dividends for FY24 to 11 sen, while GENM also proposed a dividend of four sen per share for 4Q24, bringing total dividends for FY24 to 10 sen per share.
Separately, Genting’s plantation unit Genting Plantations Bhd (GenP) announced that Datuk Indera Lim Keong Hui will assume the role of chief executive effective March 1, transitioning from his position as deputy chief executive, which he has held since Jan 1, 2019.
In a statement, the plantation group said Lim remained a non-independent executive director of GenP.
Keong Hui, the son of Tan Sri Lim Kok Thay, who is current chairman and chief executive of Genting, also holds positions at Genting Bhd and Genting Malaysia , both as deputy chief executive and executive director.
GenP said the appointment followed Datuk Seri Tan Kong Han stepping down as chief executive on the same date, a role he had held since 2019.
Tan will no longer manage GenP’s daily operations but will remain an executive director and support Lim in leading the group.
Meanwhile, Genting Bhd has appointed Tan as its new chief executive officer, effective March 1, replacing Kok Thay, who has held the position for nearly two decades.
$GENTING / 3182 (GENTING BERHAD)
$GENM / 4715 (GENTING MALAYSIA BERHAD)
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Source: The Star
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research Report by PBIV
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research Report by MAYBANK
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research Report by KENANGA
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research Report by HLIB
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research Report by CGSI
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by Maybank
PETALING JAYA: After a dismal second quarter of this financial year (2Q24), Genting Plantations Bhd is poised to see stronger second half (2H24) earnings with better oil palm fresh fruit bunch (FFB) yields, says Kenanga Research.
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by Kenanga
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by Public
Neutral – TP RM6.16
"Led by Stronger Plantation Earnings”
Genting Plantations 1HFY24 core earnings improved by 22.1% YoY to RM127.2m after stripping out i) net surplus arising from government acquisition (RM9.5m), ii) gains on disposal of assets (RM2.8m), iii) net foreign exchange differences (RM3.6m), iv) PPE written off (RM2.5m), v) impairment losses on plasma cooperative receivables (RM12m) and vi) minority interests (-RM6.8m). The stronger results were in line with our full-year expectation but a slight miss for the street, making up 48% and 44%, respectively. Maintain Neutral with a new SOP-based TP of RM6.16 after introducing our new earnings forecast for FY24-26F. A first DPS of 8sen was declared for the quarter.
Analyst:
Chong Hoe Leong
chonghoeleong@publicinvestbank.com.my
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by HLIB
HOLD – TP RM5.78
"Broadly within”
1H24 core net profit of RM115.9m (+27.8%) came in broadly within expectations, at 40-44% of consensus and our full-year estimates. Declared interim DPS of 8 sen (going ex on 12 Sep 2024 and payable on 30 Sep 2024). In view of the low FFB output clocked in YTD, management lowered its FY24 FFB output guidance and this led to slightly higher blended production cost guidance. We lower our FY24-26 core net profit forecasts by -2.2%/-0.9%/-0.1% mainly to account for slightly lower FFB yield assumption. Post earnings revision, we maintain our HOLD rating on GENP with a slightly lower sum-ofparts TP of RM5.78 (from RM5.80 earlier).
Analyst:
Chye Wen Fei
wfchye@hlib.hongleong.com.my
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by Maybank
HOLD – TP RM 5.95
"2Q24: Improving QoQ but lagging still”
1H24 core PATMI missed our/consensus estimates mainly on weaker-thanexpected output. We expect 2H earnings to be stronger HoH driven by seasonally higher 2H output and lower costs. Following our EPS revisions, GENP remains a HOLD with a new TP of MYR5.95 (from MYR6.21) on unchanged 19x FY24E PER, its -1SD of 8-yr mean. An interim DPS of 8sen was declared. We prefer SOP MK (BUY, CP: MYR2.80, TP: MYR3.18)
Analyst:
Ong Chee Ting, CA
ct.ong@maybank-ib.com
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by MIDF
BUY – TP RM6.10
"Performance Remains Intact”
• Higher CPO selling price in line with industry average
• Downstream profit reversed to black
• Earnings estimates; maintain
• Upgrade to BUY with an unchanged TP of RM6.10
Analyst:
MIDF Research Team
research@midf.com.my
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by CGS
ADD – TP RM6.62
" Proposed land acquisition in Indonesia"
■ GENP is expanding its Indonesia property exposure, which currently consists
of 9ha in Sentul City and the upcoming Jakarta Premium Outlet.
■ It will acquire 2 parcels of land at what we believe is an attractive price
compared to its previous purchase in Sentul City.
■ We maintain our estimates and target price. This note marks the transfer of
coverage of GENP to Jacquelyn Yow.
Analyst:
Jacquelyn YOW
jacquelyn.yow@cgsi.com
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by MIDF
Maintain NEUTRAL– TP RM6.10
" Land Acquisition in Sentul City Township"
Maintain NEUTRAL. We maintain our earnings forecast for FY24F/25F/26F and NEUTRAL call with an unchanged TP of RM6.10, derived from PER of 19.4x (nearly 5y average historical mean) pegging FY24F EPS of 31.4sen at this juncture pending from more clarity of the projects from the management
Analyst:
MIDF RESEARCH
research@midf.com.my
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by Kenanga
MARKET PERFORM– TP RM6.00
" Foray into Property Development in Jakarta"
GENP is venturing into property development in Jakarta, Indonesia, via the the acquisition of 375-acre land in Bogor, a major satellite city of Greater Jakarta, for IDR2,052b (RM593m). This could also signal GENP’s second Premium Outlets in Greater Jakarta. We trim our FY25F earnings forecast by 3% to account for higher finance cost but maintain our TP of RM6.00 and MARKET PERFORM call.
Analyst:
Teh Kian Yeong
tehky@kenanga.com.my
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by Maybank
Hold - TP RM6.21
“Buying land in Greater Jakarta for property development”
Following its maiden JV commercial property project with the ongoing construction of a Jakarta Premium Outlet (to be ready by end-2024) in Jakarta, GENP is now moving into a mixed property development project in Greater Jakarta. We are neutral on this MYR593m deal to buy 152ha of mixed development land plot amid lack of details on its development plans. Maintain HOLD and TP of MYR6.21 based on 19x FY24E PER, its -1SD of 8-yr mean. We prefer SDG MK (BUY, CP: MYR4.50, TP: MYR4.96).
Analyst:
Ong Chee Ting, CA
ct.ong@maybank-ib.com
$GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by HLIB
Hold-TP RM5.80
“Establishing property presence in Indonesia”
GENP’s indirect subsidiaries had entered into two conditional SPAs to acquire two adjacent land parcels (totalling 152 ha) in Sentul City (in the Bogor Regency of the West Java Province in Jakarta, Indonesia) for Rp2,052bn (or RM593m). Scheduled to be completed in 1Q25, the proposed acquisitions provide GENP the opportunity for it to establish its presence in the Jakarta property market, which may offer other opportunities to further its Indonesian expansion initiative. The latest proposed acquisitions will result in GENP’s net debt and net gearing increasing to RM1.7bn and 0.32x (from RM1.2bn and 0.22x as at 3 Mar 2024). Earnings impact, on the other hand, will likely be muted in the near term. Maintain earnings forecasts, TP of RM5.80 and HOLD rating on GENP for now, pending more updates from management.
Analyst:
Chye Wen Fei
wfchye@hlib.hongleong.com.my
PLANTATION
$IOICORP / 1961 (IOI CORPORATION BERHAD) $KLK / 2445 (KUALA LUMPUR KEPONG BERHAD) $GENP / 2291 (GENTING PLANTATIONS BERHAD)
Research by PIB
Neutral
“Inventory Jumps the Most in 8 Months”
Palm oil inventories in Malaysia extended their gains in June with an increase of 4.3% to 1.82m mt, the highest level in 4 months. YTD, CPO prices averaged RM4,025/mt, compared to our full-year average target of RM3,800/mt. In view of higher production in the second half, we expect inventory to continue trending upward, which may consequently exert downward pressure on CPO prices. We expect to see range-bound trading levels of RM3,600-3,800/mt in the 2H. At the point of writing, CPO futures stood at RM3,876/mt. Maintain Neutral on the sector.
Analyst(s):
Chong Hoe Leong
chonghoeleong@publicinvestbank.com.my
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD
Solar Power: A 54x Profit Boost Over Palm Oil – A Chance for Underperforming Companies to Unlock Value?
Large-scale solar ventures (LSS) could enable palm oil producers to generate significantly higher profits per hectare compared to traditional oil palm cultivation, according to Maybank Investment Bank.
Potential beneficiaries include $KLSE-SDG, $KLK / 2445 (KUALA LUMPUR KEPONG BERHAD), and $IOICORP / 1961 (IOI CORPORATION BERHAD), given their advantageous estate locations. Other potential beneficiaries are $GENP / 2291 (GENTING PLANTATIONS BERHAD), THPLANT and $UTDPLT / 2089 (UNITED PLANTATIONS BERHAD).
Maybank highlighted that only planters with appropriately located estates could capitalize on this solar potential. SD Guthrie has already announced its renewable energy ambitions with a target capacity of one gigawatt (GW). The company plans to develop solar farms within its estates, such as the proposed 1,000-acre development in the Kerian Integrated Industrial Park.
However, not all agricultural land is suitable for LSS, as it requires flat-to-gently undulating land near the national grid. Maybank estimates that a 1GW capacity could generate an annual income of RM134 million to RM266 million, significantly higher than the average oil palm operating profit per hectare.
Maybank noted that some planters have leased their land for LSS farms, gaining immediate rental returns rather than waiting for the typical seven-year profit period for oil palm. Maybank also suggested that it might be more financially advantageous for planters to produce solar energy themselves rather than leasing their land.
This shift towards renewable energy aligns with Malaysia's climate change policy and the Malaysia Renewable Energy Roadmap, aiming for renewable energy to comprise 40% of the country's energy mix by 2035, with solar accounting for 7.28GW.
Comment: The potential beneficiaries are primarily owning lands located in Perak, Pahang, and Johor, presenting a valuable opportunity for underperforming plantation companies to unlock value. For instance, In October 2023, Maybank IB highlighted that GENP market capitalization is lower than the value of its land holdings. GENP owns 16,908 hectares of freehold land, worth more than its market cap, with 61% in Johor, 18% in Malacca and Negeri Sembilan, 18% in Kedah and Perak, and 3% in Selangor. These lands, acquired since 1981, are strategically located and estimated to be worth MYR7.25 billion, or 1.5 times GENP’s current market cap. Additionally, the soon-to-be-listed company, $JPG / 5323 (JOHOR PLANTATIONS GROUP BERHAD), operates 23 plantation estates, with 22 in Johor and 1 in Pahang, totaling 59,781 hectares. The strategic locations of JPG's lands offer potential not only for solar projects but also for data centers.
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MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)
General Meetings: Outcome of Meeting
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD