KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Genting Bhd’s new floating liquefied natural gas (FLNG) facility is expected to significantly enhance the company’s earnings, contributing an estimated RM613 million to its net profit annually starting from FY2027, according to a recent note from CIMB Securities.
The new facility is projected to add RM1.27 per share to Genting's fair value. CIMB estimates that the FLNG could generate annual revenue of US$704 million (RM3.1 billion), based on a production capacity of 65.2 MMBtu (one million British thermal units) and an LNG price of US$10.80/mmbtu (the 10-year average). The expected net profit margin is set at 20% from FY2027 onwards.
The research firm also highlighted that funding for the FLNG facility is not expected to be an issue for Genting, given its cash reserves of RM7.2 billion at the end of the second quarter of 2024, excluding cash held by its subsidiaries Genting Malaysia Bhd (GENM), Genting Singapore Ltd (GENS), and Genting Plantations Bhd (GENP).
Furthermore, Genting is reportedly in the "advanced stages" of securing project financing from a consortium of Chinese and international lenders. The FLNG facility will be installed in West Papua, Indonesia, with feed gas supplied from Genting's Kasuri Block concession. The first LNG output is scheduled for the third quarter of 2026.
In June 2024, Genting awarded a US$1 billion contract to Wison New Energies Co Ltd for the construction of the FLNG facility at Teluk Bintuni, West Papua. The facility is expected to have an annual production capacity of up to 1.2 million tonnes.
Additionally, CIMB noted that Genting is still considering the listing of its US resorts/casinos business, as mentioned by Genting's President and Chief Operating Officer, Datuk Sri Tan Kong Han, at a recent shareholders meeting. The firm estimates that Genting Americas, which operates five resorts/casinos, could achieve an FY2027 EBITDA of around US$500 million (RM2.2 billion) under the current business conditions.
Listing the US assets could help highlight their value and potentially re-rate Genting’s share price toward CIMB's sum-of-parts (SOP)-based target price (TP), which values the US assets at an enterprise value (EV) of RM16.7 billion.
CIMB has maintained a "buy" rating on Genting, with a target price of RM6.65.
At the time of writing on Friday morning, Genting's shares had risen by four sen, or 1%, to RM4.19, giving it a market capitalisation of RM16.2 billion.
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