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Asia300

Genting shares touch 10-month high on robust earnings, dividend

KUALA LUMPUR (NewsRise) - Shares of Malaysian gaming-to-plantation company Genting Bhd. rose to their highest level in 10 months on Friday, thanks to higher-than-expected dividend payment after fourth quarter net profit jumped more than three-fold on year.

Genting climbed as much as 0.8% to 9.15 ringgit in Kuala Lumpur trading, defying a broader market decline. The stock, which has gained 14% so far this year, is still attractive due to stronger earnings outlook and remains undervalued when compared to its other listed subsidiaries, analysts said.

"2017 will be an exciting year, given the new Japan market opportunity while the home operations should see fruitful results from its expansion programme," said Kenanga Investment Bank's analyst Teh Kian Yeong. However, its Singaporean operation could face challenges in the near-term, he added.

Genting, controlled by chairman Lim Kok Thay and his family, has begun to gradually re-open some of the attractions at its flagship resort in Malaysia following a recent refurbishment effort under the so-called Genting Integrated Tourism Plan.

The decade-long initiative, launched in December 2013 and spearheaded by its listed resort unit Genting Malaysia, involves the makeover of Genting Highlands--a 44-year old hilltop resort about two-hour drive from Kuala Lumpur--that already draws some 20 million tourists annually.

"We believe that the visitation numbers will continue to grow in the next two years as more new facilities under the GITP starts operation, which will improve Genting Malaysia's competitiveness in the premium mass market," said Affin Hwang Investment Bank's analyst Ng Chi Hoong.

Net profit in the fourth quarter ended Dec. 31 jumped over three times to 1.14 billion ringgit compared with 338.95 million ringgit in the previous corresponding quarter, primarily driven by a one-off gain from the sale of its stake in Genting Hong Kong.

Quarterly revenue however slipped 3.4% on-year to 4.75 billion ringgit from 4.92 billion ringgit a year ago, owing to lower revenue from the casino business in the United Kingdom, leisure and hospitality business in the U.S., and from the power division.

Genting also declared a special dividend of 0.065 ringgit per share on top of final dividend 0.06 ringgit per share for the year.

For the whole of 2016, net profit surged 55% to 2.15 billion ringgit from 1.39 billion ringgit last year. Quarterly revenue climbed 1.5% to 18.37 billion ringgit from 18.10 billion ringgit.

In Malaysia, Genting "will remain focused on the development of the Genting Integrated Tourism Plan (GITP), with some offerings opened last year," it said, adding the remaining attractions and facilities will be opened "progressively" in 2017.

Also, Genting Singapore will continue to "adopt a measured approach in the VIP gaming business," it added.

For 2017, the performance of its plantation arm - Genting Plantations - will largely be driven by the direction of palm oil prices and fresh fruit bunches production, the company said.

Genting ended Friday up 0.3% at 9.11 ringgit while the KLCI closed 0.4% lower.

--Jason Ng

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