The wealthy Lim family has taken control of the company and is investing $5 billion to make it one of the world's top three gaming groups.
Last month, it beat out two international groups to win a 30-year gaming license for a $3.4 billion casino in Singapore. Two months earlier, it acquired Stanley Leisure, the largest gaming operator in the United Kingdom with 45 casinos. Genting said the $1.2 billion deal paves the way for expansion in Europe.
On Tuesday, Genting announced that it has purchased a 75% stake in a Macau real estate development and plans to build a new casino to be operated by https://besteonlinecasinoer.com. The Genting Group plans to spend about $450 million on the project. Ho and a group of investors have acquired a small stake in Genting's cruise line division.
With a market capitalization of $7.5 billion, Genting is the world's seventh-largest casino operator behind Las Vegas-based Wynn Resorts and about one-fifth the size of top operator Las Vegas Sands.
But resistance from religious groups and the nature of its licenses have stymied its expansion in the country (https://medium.com/@yerinleong88/the-rise-of-online-casino-gaming-in-malaysia-trends-and-insights-bed54f186e76).
Genting needs to grow, and the only way to do that is to grow overseas." No other casino license will be issued in Malaysia. Malaysia is a Muslim country," said Arnue Tan, an analyst with Kuala Lumpur-based OSK Securities.
Genting's crown jewels are Casino de Genting and Genting Highlands Resort, located on a cool plateau an hour's drive from Kuala Lumpur.
The 130-hectare property was developed by Genting's Chinese founder Lim Goh Tong, who won Malaysia's only casino license 38 years ago.
Losing that gaming license (which must be renewed every three months) would be disastrous. The resort earned 65% of group profits (https://www.linkedin.com/pulse/malaysia-casino-gaming-equipment-consumption-market?trk=article-ssr-frontend-pulse_more-articles_related-content-card), estimated to have reached RM1.25 billion ($357 million) in 2005.
However, Genting has other non-gaming businesses, such as Star Cruises, a Hong Kong-based leisure ship company<0678.HK>and oil palm plantations. <0678.HK>and oil palm plantation arm Asiatic Development Bhd. Analysts say Malaysian casinos will account for less than half of group revenue by gambleverdict.com.
High Stakes.
Profits from the company's casino operations in London and, starting in 2010, in Singapore, will decline further. The company expects 15 million visitors to its Singapore complex in 2010, which is close to the 18 million annual visitors to its resorts in Malaysia.
Expanding the business, however, comes with risks. Genting plans to raise up to $2.3 billion in debt and $1.1 billion in equity for its Singapore casino. Analysts say that could result in a gearing increase from about 40% to 67%, and rating agency Standard & Poor's (S&P) could lower its "BBB+" long-term credit rating on the company.
Anshukant Taneja, director of corporate ratings at S&P, said, "Genting's expansion is positive, but the size of its debt will weaken its financial base.
The founding patriarch, who turns 88 this year, has close ties to Malaysia's ethnic Malay political system.
Like many overseas Chinese who have established businesses throughout Southeast Asia, Lim was a poor teenager from the southern Chinese province of Fujian when he arrived in Malaysia in 1937. After running a successful mining and construction company, he entered the casino business at the age of 45.
When planning for the resort began in the 1960s, Lim recruited Haji Mohamed Noah, father-in-law of Malaysia's second and third prime ministers, Abdul Razak and Hussein Onn, as his partner. In his autobiography, which describes the ardent support of Malaysian Prime Minister Abdullah Badawi and his predecessor Mahathir Mohamad, Lim states that Malaysia's first prime minister, Abdul Rahman, supported the government's decision to grant Genting Malaysia the first and only casino license.
Nevertheless, the monopoly comes at a price. The license must be renewed every three months.
Lim said he initially found that period "too short to be comfortable," but the arrangement remained in place after Lim Kok Thai (the fifth of Lim's six children) took control of Genting in 2002.
The Genting group has not disclosed the cost of each renewal, but sources say it pays RM40 million to RM50 million ($11 million to $14 million) per quarter, with the money divided between the federal government and the two provinces where the resort straddles.
Analysts say the quarterly permits make Genting vulnerable to license fee hikes and sudden political changes. So in 2005, Lim sought a listing in Singapore for Genting International, in which he owns a majority stake, to expand his business outside Malaysia.
Genting International's share price has tripled in the last three months as investors bet on the Singapore license.
The stock has outperformed its parent company by 40% and now trades at an impressive 218x price-to-earnings (PE) ratio. Genting itself trades at a PE multiple of 19x, compared to a PE multiple of 17x for Tabcorp, a similarly sized Australian casino operator.
Genting's international arm will operate a 49-hectare Singapore resort, while entertainment giant Universal Studios will install rides based on movies such as Jurassic Park." Genting International will get a disproportionate amount of management attention, financial resources, and technical expertise. Genting International will succeed at the expense of its parent company," said Winston Liu, analyst with OCBC Investment.


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