Both complaints, however, would not affect Genting Malaysia’s valuation as determined by CGSI Research.
PETALING JAYA: The lawsuit filed against Genting Malaysia Bhd
by its joint-venture partner in the Bahamas may affect the former’s bid for a casino licence in New York.
In addition to the lawsuit, which was filed by RAV Bahamas Ltd against Genting Americas Inc (GAI), CGS International (CGSI) Research also raised concerns about the Nevada gaming regulator’s complaints against Resorts World Las Vegas.
Resorts World Las Vegas is run by Genting Malaysia’s parent company Genting Bhd.
Both complaints, however, would not affect Genting Malaysia’s valuation as determined by CGSI Research.
“This is because we have not factored in any potential upside from its New York casino bid. We only include Genting Malaysia’s land at book value in our sum-of-parts valuation,” stated CGSI Research.
On Oct 14, Genting Malaysia announced that its indirect wholly-owned subsidiary GAI has been named in a complaint filed by RAV on Oct 7 before the US District Court Southern District of Florida, which involved the operations of Resorts World Bimini (RW Bimini) in the Bahamas.
RAV sought damages in excess of US$600mil, following its allegations that the Genting group has dumped nearly a billion dollars of debt on RW Bimini.
RW Bimini is owned and operated by BB Entertainment Ltd (BBE), in which Genting Malaysia indirectly holds 78% interest while RAV holds the remaining 22% interest. GAI is an affiliate company of BBE.
Genting Malaysia said the complaint was baseless and without merit, and that it would vigorously defend against the complaint.
“While we do not wish to speculate on the outcome of this case, in the worst case scenario where GAI is found guilty, the US$600mil claim would be equivalent to 46 sen per Genting Malaysia share, based on Genting Malaysia’s share base of 5.67 billion shares,” said CGSI Research.
Despite the latest development, the research house has retained its “add” call.
“We see a robust three-year earnings per share compound annual growth rate of 42% in the financial years of 2023 to 2026, supported by the recovery in tourism and growth in Resorts World Genting’s revenue.“Genting Malaysia currently trades at a 12.7 times price-to-earnings (PE) ratio for 2025, two standard deviations below its historical pre-Covid-19 mean PE of 18 times,” it added.
