PP 7767/09/2010(025354)

RHB Research
Corporate Highlights
Malaysia
Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

Re su l ts / Bri e fi ng No t e
31 May 2010
MARKET DATELINE

Genting Share Price

Fair Value
:
:
RM6.73
RM8.95
Recom : Outperform
(Maintained)
Boosted By Maiden Contribution From Singapore

Table 1 : Investment Statistics (GENTING; Code: 3182) Bloomberg: GENT MK

Net Net
FYE Turnover Profit ^ EPS Growth PER C.EPS* P/CF P/NTA EV/EBITDA Gearing GDY
Dec (RMm) (RMm) (sen) (%) (x) (sen) (x) (x) (x) (%) (%)
2009 8,893.6 1,168.3 31.5 (31.4) 21.3 10.2 2.7 7.1 Net Cash 1.1
2010f 13,971.1 3,122.3 53.4 69.3 12.6 40.0 13.5 2.1 5.0 11.9% 1.4
2011f 16,152.7 2,084.1 56.4 5.7 11.9 51.0 4.9 1.8 4.0 Net Cash 1.7
2012f 17,785.7 2,416.1 65.4 15.9 10.3 57.0 4.7 1.8 4.1 Net Cash 2.1
Main Market Listing / Non-Trustee Stock / Non-Syariah-Approved Stock By The SC ^normalised * Consensus Based On IBES

♦ In line with ours, but above consensus on PBT level. Genting’s Issued
RHBRI
Capital (m shares)
Vs. Consensus
3,703.6
1QFY10 normalised pretax profit was in line with our expectations, coming Market Cap(RMm)Above 25,369.4
in at 24% of our FY10 forecasts, but above consensus, comprising 30% of Daily Trading Vol In
(mLine
shs) 5.9
consensus forecasts. We compare our forecasts at the pretax profit level as 52wk Price Range Below
(RM) 6.40 - 9.25
Major Shareholders: (%)
Genting’s net profit has been skewed by a large RM266.9m positive Issued Capital (m shares) 3,704.9
Kien Huat Realty Sdn Bhd 41.5
minority interest caused by the losses recorded in Genting Singapore (GS) Market Cap(RMm) 24,933.6
Free
Dailyfloat 58.5
in 1Q10. No dividend was declared during the quarter. Trading Vol (m shs) 5.7
52wk Price Range (RM) 5.20 – 7.87
♦ More than threefold rise in core net profits. Core net profit rose more Major Shareholders: (%)
FYE Dec FY07 FY08 FY09
than threefold on the back of a 50.5% yoy rise in turnover. The significant Kienchg
Huat Realty Sdn Bhd (5.9) 41.5
EPS (%) (6.0) (6.0)
increase in turnover and profit was mainly due to the maiden contribution Freetofloat 58.5
Var Cons (%) (1.7) (0.0) (14.5)
of Genting Singapore’s IR, which contributed 33% to total gaming revenue
and 26.5% to total gaming EBIT. EBIT margins in the gaming operations in FYE
PE Dec Chart
Band FY10 FY11 FY12
Malaysia and UK improved on the back of better luck factor, while EBIT EPS chg (%) 16.4 (0.4) (0.8)
margins for the plantations division also rose on the back of higher CPO Var to Cons (%) 33.4 10.6 14.7
prices achieved. This was offset slightly by weaker margins in the property,
PE Band Chart
power and oil & gas divisions. The relatively larger rise in core net profit
was due to the positive minority interest mentioned above (see Tables 2
and 3 for detailed breakdown).
PER = 20x
♦ Risks. The main risks include: 1) lower-than-expected visitors and
PER = 15x
PER = 10x
revenue per visitor for Resorts’ operations; 3) larger-than-expected costs
of construction of the Singapore IR; (3) lower-than-expected casino
patronage in GIL’s UK operations; and (4) lower-than-expected CPO prices Relative Performance To KLCI

for its plantations operations, amongst others.

♦ Forecasts. While we maintain our PBT forecasts, we revise our net profit
Relative Performance To FBM KLCI
forecasts by 16.4% for FY10 (or core net profit forecasts by +84.3%),
after taking into account the positive minority interest recorded during the
quarter, and tweak our forecasts for FY11-12 by 0.4-0.8% p.a.. We expect Genting
stronger earnings in the next few years coming from contributions from
Genting Singapore; improved prospects of the plantations division coming
FBM KLCI
from higher CPO prices and improved FFB production; new contributions
from its recently commissioned 366MW power plant in Andra Pradesh;
offset slightly by lower topline contributions from the Malaysian casino;
and lower contributions from its China power plant due to the recent spike
in coal prices.

♦ Investment case. Post-earnings revision and after updating for the

Hoe Lee Leng
latest market value of Landmarks, and the latest company net debt level (603) 92802184
for Genting (ex-GM and GS), our SOP-based fair value for Genting is raised Hoe Lee Leng
hoe.lee.leng@rhb.com.my
slightly to RM8.95 (from RM8.90) (see Table 4). Maintain Outperform. (603) 92802184
hoe.lee.leng@rhb.com.my
Please read important disclosures at the end of this report.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com

Page 1 of 5
 31 May 2010

Table 2 : Earnings Review

FYE Dec 1Q09 4Q09 1Q10 % qoq % yoy 1QFY09 1QFY10 % yoy Comment
(RMm)
Turnover 2069.2 2320.1 3113.7 34.2 50.5 2069.2 3113.7 50.5 See Table 3
EBITDA 790.8 744.0 1262.3 69.7 59.6 790.8 1262.3 59.6 See Table 3
Depreciation -168.4 -175.8 -212.4 20.8 26.1 -168.4 -212.4 26.1
EBIT 622.4 568.2 1049.9 84.8 68.7 622.4 1049.9 68.7 See Table 3
Exceptionals -30.4 26.7 -800.4 -3097.7 2530.7 -30.4 -800.4 2530.7 See Table 3
Net interest -34.1 -41.8 -76.2 82.3 123.5 -34.1 -76.2 123.5 See Table 3
Associate 8.9 32.6 26.7 -18.1 200.0 8.9 26.7 200.0 See Table 3
Pretax profit 566.8 585.7 200.0 -65.9 -64.7 566.8 200.0 -64.7
Norm pretax 597.2 559.0 1000.4 79.0 67.5 597.2 1000.4 67.5 Flow through from EBIT and higher net interest
expense
Taxation -183.3 -189.6 -234.6 23.7 28.0 -183.3 -234.6 28.0 Due to non-deductible nature of impairment losses
Discontinued 0.0 0.0 0.0 - - 0.0 0.0 -
op (paper)
MI -170.5 -150.7 267.0 -277.2 -256.6 -170.5 267.0 -256.6 Due to maiden contribution from Genting
Singapore
Net profit 213.1 245.4 232.4 -5.3 9.1 213.1 232.4 9.1
Norm Net 243.5 218.7 1032.8 372.2 324.1 243.5 1032.8 324.1 Flow through from norm PBT and higher MI
EPS (sen) 5.8 6.6 6.3 5.8 6.3 9.0
Gross DPS 0.0 4.2 0.0 0.0 0.0
(sen)
Margins
EBITDA 38.2 32.1 40.5 38.2 40.5
EBIT 30.1 24.5 33.7 30.1 33.7
Pretax 27.4 25.2 6.4 27.4 6.4
Norm pretax 28.9 24.1 32.1 28.9 32.1
Tax rate 32.3 32.4 117.3 32.3 117.3

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com Page 2 of 5
 31 May 2010

Table 3 : Segmental Review

FYE Dec 1Q09 4Q09 1Q10 % qoq % yoy 1QFY09 1QFY10 % yoy Comment
(RMm)
Turnover
Gaming 1400.7 1537.7 2412.2 56.9 72.2 1400.7 2412.2 72.2 Domestic gaming revenue expanded by 14.2%
yoy on the back of higher volume of business
and better luck factor in the premium segment in
1QFY10. In UK, casino revenue rose 20.6% yoy
due to better luck factor, offset slightly by
weakening of GBP versus SGD. In Singapore, the
maiden contribution from the IR operations
contributed 33.3% to total gaming revenue,
despite being in operations for just 45 days in
1Q10. (see Genting Malaysia report 31 May and
Genting Singapore report dated 14 May)
Plantation 115.9 216.9 195.6 -9.8 68.8 115.9 195.6 68.8 YoY increase due to 10.4% yoy rise in FFB
production and 38% increase in average CPO
selling price to RM2,563/tonne and 69% increase
in average PK selling price to RM1,404/tonne
(see Genting Plant report dated 27 May)
Properties 21.7 27.7 20.1 -27.4 -7.4 21.7 20.1 -7.4 No new launches in 1Q10 due to continued
weakness in buyer sentiment in Batu Pahat and
Johor (see Genting Plant report 27 May)
Power 497.5 478.9 444.2 -7.2 -10.7 497.5 444.2 -10.7 Decrease due to lower generation of electricity by
both Kuala Langat and Meizhou Wan power
plants
Oil & Gas 28.5 40.4 26.0 -35.6 -8.8 28.5 26.0 -8.8 Decline due to lower share of entitlement in
China despite higher average oil prices
Others 4.9 18.5 15.6 -15.7 218.4 4.9 15.6 218.4 Including the bio-oil and plastic composite
businesses
Total T/O 2,069.2 2,320.1 3,113.7 34.2 50.5 2,069.2 3,113.7 50.5
EBIT
Gaming 573.7 376.4 989.1 162.8 72.4 573.7 989.1 72.4 Flat margins overall, as higher domestic and UK
margins were pulled down by lower margins in
Singapore operations. In domestic business,
margins higher by 2.5%-pt yoy due to better
luck factor in the premium player segment. In UK
operations, better luck factor also pushed
margins higher by 5.9%-pt yoy. In Singapore,
maiden contributions which contributed 26.5% to
group EBIT includes preoperating expenses (no
amount specified, but estimated to be less than
4Q09’s of S$74.2m)
Plantation 49.4 92.8 97.0 4.5 96.4 49.4 97.0 96.4 EBIT margin rose 7.0%-pts in 1QFY10 on the
back of higher CPO prices, but offset slightly by
higher production costs (+10% yoy)
Properties 10.0 3.3 8.7 163.6 -13.0 10.0 8.7 -13.0 EBIT margin fell 2.8%-pts, due to lower profits
recognised during the quarter
Power 163.9 103.1 133.5 29.5 -18.5 163.9 133.5 -18.5 Lower margins (-2.9%-pts) of 30.1% (from
32.9% in 1QFY09) due to lower economies of
scale
Oil & Gas 14.9 -9.6 4.6 -147.9 -69.1 14.9 4.6 -69.1 Margins weakened (-34.6%-pt) on the back of
lower share of entitlement in China
Others -189.5 2.2 -183.0 -8418.9 -3.4 -189.5 -183.0 n.m.
Total EBIT 622.4 568.2 1049.9 84.8 68.7 622.4 1049.9 68.7
Exceptionals -30.4 26.7 -800.4 -3097.7 2530.7 -30.4 -800.4 NM Includes: net gain on dilution of Genting
Singapore’s (GS) shareholdings of RM436.3m,
fair value gain on derivatives of RM67.1m, net
fair value gain on financial assets of RM1.8m, net
impairment losses on Walker Digital of RM110m
and impairment loss on intangible assets for GS's
UK operations of RM1.15bn (SGD478.1m)
Net interest -34.1 -41.8 -76.2 82.3 123.5 -34.1 -76.2 123.5 Lower interest income rates
Associate 8.9 32.6 26.7 -18.1 200.0 8.9 26.7 200.0 Higher share of profit from the new power plant
in Andhra Pradesh and increased contribution
from the existing power plants in India
Total PBT 566.8 585.7 200.0 -65.9 -64.7 566.8 200.0 -64.7
Margins
Gaming 41.0 24.5 41.0 41.0 41.0
Plantation 42.6 42.8 49.6 42.6 49.6
Properties 46.1 11.9 43.3 46.1 43.3
Power 32.9 21.5 30.1 32.9 30.1
Oil & Gas 52.3 (23.8) 17.7 52.3 17.7
Total 30.1 24.5 33.7 30.1 33.7

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com
 31 May 2010

Table 4: Genting’s SOP Calculation

RMm Basis

Genting Malaysia 8,689.6 Fair value of RM2.90/shr

Genting Plantations 2,754.1 Fair value of RM6.65/shr
Genting Singapore 20,563.0 Fair value of S$1.35/shr
Management fees 5,270.7 DCF at WACC of 10.1%
30% discount (to factor difference in concession period) to US$0.94 EV per
Power
3,345.0 effective MW (price paid for Meizhou)
Oil & Gas 37.8 20% discount to sector average PER of 15x
Tangguh concession 1,848.0 Genting's share of profit
Landmarks 158.8 Market price
Net cash/(debt) (ex-Genting Malaysia and
1QFY10
Genting Singapore) (1,218.0)
Sum of Parts 41,448.9

No. of shares (m) 3,704.9

SOP/share (RM) 11.19
Less: Holding company discount (20%) (2.24)
SOP/share (RM) 8.95

Table 5. Earnings Forecasts Table 6. Forecast Assumptions

FYE Dec (RMm) FY09a FY10F FY11F FY12F FYE Dec FY10F FY11F FY12F

Turnover 8,893.6 13,971.1 16,152.7 17,785.7 Msian Casino visitor gth (%) -4.0 2.0 2.0
Turnover growth (%) (2.1) 57.1 15.6 10.1 Revenue per visitor gth (%) 1.0 2.0 2.0
CPO Price (RM/t) 2,500 2,700 2,500
EBITDA 3,182.6 4,924.3 5,868.1 6,628.5
EBITDA margin (%) 35.8 35.2 36.3 37.3

Depreciation (687.1) (1,128.7) (1,224.0) (1,216.6)

Net Interest 136.5 422.0 337.8 247.0
Associates 20.4 21.8 22.8 23.8
EI (123.9) (1,150.0) - -

Pretax Profit 2,528.4 3,089.4 5,004.7 5,682.6

Tax (745.6) (705.6) (1,120.6) (1,253.6)
PAT 1,782.8 2,383.8 3,884.2 4,429.1
Minorities (738.5) (411.5) (1,800.1) (2,013.0)
Net Profit 1,044.3 1,972.3 2,084.1 2,416.1
Core Net Profit 1,168.3 3,122.3 2,084.1 2,416.1
Source: Company data, RHBRI estimates

IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank
Berhad (previously known as RHB Sakura Merchant Bankers Berhad). It is for distribution only under such circumstances as may be permitted by applicable
law. The opinions and information contained herein are based on generally available data believed to be reliable and are subject to change without notice, and
may differ or be contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This
report is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything
stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBRI. RHBRI and/or
its associated persons may from time to time have an interest in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and
objectives of persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors
independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a
particular investment or strategy will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates,
employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as
providing investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing activities, any member of
the RHB Group may at any time hold positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers, in debt or
equity securities or loans of any company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective
directors, officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking
or other services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.

The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

The recommendation framework for stocks and sectors are as follows : -

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com
 31 May 2010

Stock Ratings

Outperform = The stock return is expected to exceed the KLCI benchmark by greater than five percentage points over the next 6-12 months.

Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or
more over a period of three months, but fundamentals are not strong enough to warrant an Outperform call. It is generally for investors who are willing to
take on higher risks.

Market Perform = The stock return is expected to be in line with the KLCI benchmark (+/- five percentage points) over the next 6-12 months.

Underperform = The stock return is expected to underperform the KLCI benchmark by more than five percentage points over the next 6-12 months.

Industry/Sector Ratings

Overweight = Industry expected to outperform the KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Neutral = Industry expected to perform in line with the KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Underweight = Industry expected to underperform the KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

RHBRI is a participant of the CMDF-Bursa Research Scheme and will receive compensation for the participation. Additional information on recommended
securities, subject to the duties of confidentiality, will be made available upon request.

This report may not be reproduced or redistributed, in whole or in part, without the written permission of RHBRI and RHBRI accepts no liability whatsoever for
the actions of third parties in this respect.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com Page 5 of 5