Swot Analysis for Genting

SWOT Analysis

Strength

Diversified business portfolio

-Beside leisure and plantation, Genting also contribute in other businesses such as power, an independent power producer located in Asia. (Malaysia, China, India)

Efficient use of resource

Strong liquidity position

Opportunities

Malaysian tourism industry

Opening of johor premium outlets

-Premium outlet to be opened in end-2011. Recall that in

September last year, GENP signed an agreement to form a

50:50 joint venture (JV co.) with Chelsea Malaysia, a unit of

Simon Property group Inc. (known as the world’s largest

developer, owner and operator of premium outlet centers),

to establish Chelsea Premium Outlet Centers in Malaysia.

The first outlet will be developed in Kulai, Johor (known as

Johor Premium Outlets) on land presently owned by GENP.

GENP will sell the land to the JV co. for the development of

the outlet. The JV had become unconditional and completed

in July this year. We understand that earthworks have

started and construction is expected to start next month.

The outlet, which will be operated by the JV co., is

scheduled to be opened at end-2011 at development cost of

c.RM150m (funded by both equity and borrowings).

Assuming RM15 rental psf/month, 80% occupancy rate on

its 170,000 sq ft of net lettable area, and 65% EBIT margin,

the premium outlet project could add c.2% to FY12F

earnings. We understand that rental will be charged based

on a fixed minimum guaranteed payment or percentage of

turnover, whichever is higher

-Opening of RWS ( already opened)

Weaknesses

Limited geographic presence

Plantation ( no experience and not fully use the land)

Threats

Growing and intense competition

Pandemic