Genting Plantations
Plans to develop Johor landbank
Genting Group revealed yesterday it plans to develop a premium shopping mall via Genting Plantations in Johor’s Iskandar Malaysia region. The development will be in a form of JV with U.S.’s Simon Property Group and Genting Plantation’s contribution is expected to be around RM200m. The mall will be part of the Group’s plan to develop a recreation hub, which will consists of not only the mall, but also hotels and a theme park, to draw visitors to its casino resorts in Malaysia and Singapore.
We are positive on the plan as: (1) The development of the hub will enable the company to unlock the value of its 10,000 acres landbank in Kulai, Johor. (2) The expected development cost of RM200m is within its financing ability as it is sitting on a net cash pile of RM183m as of 30 Sep 2009.
Genting Plantations is currently trading at 16x FY11E PE, a 15% premium to peers.
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