Stock Analysis: GENTING (3182)

This is the background picked from the genting website:
"Genting Berhad is the investment holding and management company of Genting Group. Genting Group was founded by Tan Sri Lim Goh Tong in 1965 when he began the initial development works of building a 20-kilometre private access road, across tough mountainous terrains from the foothills to the summit of Mount Ulu Kali, located at 2,000 metres above sea level.

Genting Group via Genting Berhad became involved in palm oil production in 1980 with the acquisition of The Rubber Trust Group, comprising three Hong Kong plantation companies, which owns approximately 13,660 hectares of plantation land in Peninsular Malaysia.

Genting Group via Genting Berhad became involved in the electricity power generation and supply and the paper manufacturing businesses in 1994, with the acquisition of Genting International Paper Holdings Limited and in the exploration and production of oil and gas in 1996 under Genting Oil & Gas Limited. In July 2007, the Group divested its paper and packaging business to focus on its core businesses.

Genting Berhad is one of the largest listed companies in Malaysia with a market capitalisation of about RM27.54 billion (US$7.9 billion), as at 22 August 2007, The authorised share capital of Genting Berhad was RM800 million (comprising 8 billion shares of RM0.10 each) and the issued and paid-up share capital of Genting Berhad was RM369.7 million (comprising 3.7 billion shares of RM0.10 each) as at 22 August 2007.
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From the business tenet, this business group has a consistent operating history from 1965 til present. The competative advantage of Genting is owning the solely Casino License in Malaysia. Having the average of 20% Net profit margin and 18% of annual revenue growth from 2002 to 2006.

Here is the PE analysis result:
Assume that year 2007 revenue is estimated to be 8.2 bil based on the 18% of annual revenue growth. Using the average NPM of 20%, it yield a net profit of 1.763 bil or translate to EPS of RM0.476 (with the outstanding share of 3.7 bil unit of share). Again PE analysis is using the historical data of 6 years PE track record, which is from 2002 to 2007.



The target price is projected as RM6.78, which is the center point Avg PE (15.54) and Min PE (12.94) with the EPS of RM0.476.

Here is the Deal:
This stock currently traded at RM8.05 does not reflect a good deal to buy in, which the stock is at non-discounted price. In my opinion, whenever the stock price is trading at the Avg PE price, it is worth to monitor and can consider to buy into your portfolio.

The Genting stock analysis spreadsheet can be obtained by click here