Friday, February 17, 2012

Genting Plantations

Sources say that there is a potential sale of the plantations division by the Genting group. While it is cashflow producing, it isn’t exactly their core business.

But at its current price, Genting Plantations has a market capitalisation of some RM7.18bil, which makes it an expensive acquisition target by any party. It is trading at an estimated price-to-earnings ratio of 16 times for the 2012 financial year, somewhat higher than its peers United Plantations Bhd (12 times), and Sime Darby Bhd (15 times), but cheaper thanIOI Corp Bhd’s 17 times.

Another positive factor for Genting Plantations was its bustling Johor Premium Outlets (JPO).

The mall, which sells off-season luxury items at a discount, is the only Premium Outlet in South-East Asia, while 58 others are in countries such as the United States , Japan and South Korea . Its stable of brands include Armani, Burberry, Canali, Coach, Ermenegildo Zegna, Guess, Michael Kors, Ralph Lauren and Salvatore Ferragamo.

JPO is a 50:50 joint venture between Genting Plantations, a Genting Bhd subsidiary, and Premium Outlets, the retail outlet division of Simon Property Group Inc.

Under the second phase of its development, Genting plans to spend RM100mil to increase the number of stores to 130 from the present 70. The company is also expected to invest up to RM1bil to develop the area, including constructing a 2,000-room hotel and a water theme park and a meeting, incentive, conference and exhibition centre.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.