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Read an article from biztimes published on August 4, 2010, and take note of the following points:

  • Genting HK is now a three-pronged gaming entity comprising Star Cruises in Asia, Norwegian Cruise Line (NCL) in the US, and Resorts World Manila (RWM) in the Philippines.
  • At 26 US cents, the stock of Genting HK is trading at a significant discount to those of its peers and just close to its own net book value.
  • Star Cruises started operating the Hong Kong-Taipei route in May 2009 and is seeing a sharp earnings recovery, thanks to savvy restructuring and an occupancy of 90 per cent. The fleet, valued at almost US$5 billion, gets two-thirds of its gaming revenue from the non-Singapore cruise business and its operating profit is expected to reach US$50 million this year.
  • 50 per cent-owned NCL is back in the black, thanks to aggressive cost management and a strong wave of bookings. The latest vessel - the US$1.3 billion Norwegian Epic, which was launched in July - is expected to contribute to earnings this year, with a six-year payback.
  • The jewel in Genting HK's crown has to be its 50 per cent-owned Resorts World Manila (RWM). Built at a cost of US$400 million - less than a tenth of what it cost to build each of the two IRs here - this is a pure casino play. The property, which is three times the size of its Sentosa sister, has been raking in the big bucks, thanks to its ability to leverage on the Genting group's network of high rollers and significantly lower gaming taxes (at 25 per cent).
  • With a current daily gross win at its casino of US$1 million a day, Genting HK is expected by analysts to see a payback period of under five years - a truly remarkable return on investment.
  • With its 30,000 square metres shopping mall due to open later this year, RWM is also seen by industry observers as being able to contribute almost US$40 million to Genting HK's bottom line this year, and some US$70 million net profit in 2011. This is even before it builds its planned mega casino-cum-theme park on its 37 hectare site. If it delivers on its potential, RWM could become the most profitable casino operator in the Asia Pacific in short order.
  • There is speculation that Malaysian gaming tycoon Lim Kok Tay, who controls 72 per cent of Genting Hong Kong, could - at some point - decide that Genting HK's three profitable and independent businesses (Star Cruises, NCL and RWM) should be demerged and listed separately. Such a move would significantly boost shareholders' value.
  • Genting HK, whose RWM has a domestic market base of 100 million people (versus 29 million for Genting Malaysia and five million for Genting Singapore), should in time replicate RWS's potential and further add to the group's value proposition.


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