Maybank is optimistic of Genting Plantation’s property potential in unlocking the value of its strategic landbank in Johor, however the house notes that earnings delivery will take time as group has no immediate plans for land disposal unless potential buyer(s) can further enhance the value of its existing townships.
The often forgotten property division, during a meeting the discussion was mainly focused on its lesser known but important property division which commenced township development in 1993. While this division is presently a smaller contributor to the group with MYR56m PBIT or 17% of group 9M23 PBIT, it has immense potential for bigger contribution. At its peak in 2014, it contributed MYR155m in PBIT or 31% of group PBIT. For now, its FY24E-25E earnings growth should emanate from property launches and sales at its two active township developments in Kulai (flagship township) and Batu Pahat, and a new premium outlet in Jakarta scheduled to open in 1Q25.
In terms of launches, the house gathers that GENP has plans to launch about MYR480m in new property in 2024. Part of these launches are brought forward from 2023, namely the industrial launches at Batu Pahat worth approximately MYR230m. GENP also plans to launch c.MYR250m worth of projects (mainly residential) in Genting Indahpura, Kulai.
Future development potentials lie in 3 other projects
Without committing on a timeline, GENP plans to develop its 9-acre land in Segambut, (2) 1,067-acre land in Sepang (next to KLIA), and 23-acre land in Sentul City, Jakarta sometime in the future. These areas have the potential to be the next earnings growth catalyst for the group. Maybank says it is keeping the earnings forecasts.
