GENTING / 3182 - 2009 Q4

OSK Research TP: 7.9 (26 Nov 09)
My max TP: 7.72
My low TP: 6.16
My decision: NOT BUY (unless price uptrend appear)
Reason: Overvalue, price downtrend

My opinion based on 2009 Q4 report (number in '000):
- ROE compare to last Q decreased 0.62% to 0.95% but higher than last year 1.51%
- Revenue compare to last Q dropped 3.39% to 2320097 and profit also dropped 3.38% to 244952. The UK casinos generated lower revenue as a result of lower business volume and lower win % due to poor luck factor. The decrease was further exacerbated by the weakening of the Sterling Pound against the Ringgit Malaysia. Plantation Division declined due to lower palm products prices and lower FFB production. Lower revenue from the Property Division was due to softer property market conditions. The profit of the Leisure & Hospitality Division has also been impacted by the significant increase in pre-operating expenses incurred by Resorts World Sentosa, mainly in relation to staff costs as the integrated resort begins to accelerate its recruitment, training, sales and marketing programs prior to its launch. Lower profit from the Oil & Gas Division was due to lower average oil prices and higher costs incurred. The higher profit from the Power Division was due mainly to the improved performance of the Meizhou Wan power plant which arose primarily from higher revenue and lower coal prices.
- As compare to last year revenue dropped 2.93% but profit growth 302.8%, The previous year loss had been due mainly to the GENM Group’s impairment loss of RM781.5 million on its investment in Genting HK. Property and Power divisions recorded higher revenue whilst the other business divisions recorded lower revenue.
- Equity compare to last Q increased 8.81% to 25712405, assets increased 9.84% to 43501048 and liabilities also increased 11.36% to 17788643; As compare to last year, equity increased 20.08%, assets increased 42.86% and liabilities also increased 96.84%
- Minority interest compare to last Q increased 19.13% to 11825274 and also higher than last year 31.81%
- FCF -3140558, NCF 5056851
- Profit margin compare to last Q decreased 4.85% to 10.56% but higher than last year 15.61%
- DE compare to last Q increased 0.0158 to 0.6918 and also higher than last year 0.2698
- 4.2 sen dividend recommended
- My estimate next 4Q eps after 2009 Q4 result announced = 0.0661*4 = 0.2644, estimate PE on current price 6.31 = 23.6(DPS 0.072)

- From date 2009-11-26 to 2010-02-25 after 2009 Q3 result announced, highest price on 2010-01-06 was 7.7 and lowest price on 2010-02-25 was 6.31. Estimate next 4Q eps = 0.0999*4 = 0.3996, estimate highest/lowest PE = 19.09/15.62 (DPS 0.07)
- From date 2009-08-27 to 2009-11-25 after 2009 Q2 result announced, highest price on 2009-10-23 was 7.74 and lowest price on 2009-09-02 was 6.45. Estimate next 4Q eps = 0.0577*4 = 0.2308, estimate highest/lowest PE = 33.23/27.64 (DPS 0.07)
- From date 2009-05-29 to 2009-08-26 after 2009 Q1 result announced, highest price on 2009-07-28 was 6.7 and lowest price on 2009-06-18 was 5.35. Estimate next 4Q eps = 0.0574*4 = 0.2296, estimate highest/lowest PE = 28.88/23 (DPS 0.07)

- Divident in sen 2009 = 0.072 (recommended 4.2 sen on Q4 and recommended 3 sen on Q2), 2008 = 0.07 (recommended 4 sen on Q4 and recommended 3 sen on Q2), 2007 = 0.37 (recommended 4.3 sen on Q4, recommended 30 sen on Q3 and recommended 2.7 sen on Q2), 2006 = 0.16 (recommended 4 sen on Q4 and recommended 12 sen on Q2)