Genting Reasonable price = RM7.12 ???

Genting 1Q 2008 net profit drip 33.09% to RM439 million.
Genting (earning per share) EPS drop 11.87 sen from 17.78 sen.

From the information, we can do simple analysis on Genting share price using PE ratio. We assume the Genting PE ratio is 15 which is consider low compare to other casino operators stock PE ratio. We assume the EPS of Genting same for every quarter, so EPS per year is
11.87 x 4 = 47.48 sen

Then the EPS per year multiply with PE ratio (15), so we will get the reasonable share price for Genting. So we can get RM7.12 by this analysis. What i can say this is the simplest way to estimate the price of stock but not necessary accurate or correct.

Please bear your own risks when invest in Genting.

June 26, Dividend as RM0.043

Genting will pay Final Dividend of 4.30 sen less 26% tax per ordinary share of RM0.10 each.
Ex-date: 26/06/08

June 23, Genting Annual Meeting 2008

The AGM will be held at Nirwana Ballroom, Lower Lobby, Crowne Plaza Mutiara Kuala Lumpur, Jalan Sultan Ismail, 50250 Kuala Lumpur on Monday, 23 June 2008 at 2.30 p.m.

Genting power assets worth RM3 billion ONLY?

Genting used to say she want the power generation business in her portfolio to offset the effect on economy circle to her casino core business.

But after Genting got the chance to expand to Singapore, I think she has change her strategy from diversification to focus on her core business. We can easily see her ambition to become regional player and later global player. Disposing her non core business is the strong evidence to prove Genting determination towards her ambition.

The power generation business is contributing 16% to Genting operating profit and it proved as cash generating and stable business that will not affect by economy cycle. Some have say that the power assets of Genting worth more than RM3 billion, and it can be RM4.5 billion.

As I said before, I am very welcome that Genting to dispose her non core business and focus on core business but she can not just sell her power assets with big discount while that profit making business. Genting should get premium from the disposal or at least with reasonable price. I believe there is many specialist in Genting can help to calculate that or just refer to the analyst who quote RM4.5 billion and Mr. Lim who has good business sense should not make wrong decision on this manner.

Genting get oil and gas business in Indonesia

Genting had oil and gas business in China and Morocco and now in Indonesia. The significant of oil and gas business can contribute to the bottom line is unknown yet.

One thing is good that Genting involve in the hottest industry due to the raise of oil price almost US$135 by end of May 2008. At the same time of engagement in oil and gas business, Genting dispose her power assets.

The information on this still lack, maybe they will give more detail on the annual meeting 2008 will hold on June 26.

Genting selling off her power assets

Genting owning quite number of power plants in Malaysia, China and India and according to my knowledge that they are making money for Genting but now Genting is disposing them off.

Undoubted, Genting would like to focus on casino business by disposed power assets following paper and packaging business. I will give fully support if the power plant making loss and the fact is opposite. Power plant is one of the most stable business in the world, and it is too stable in term of earning also but there is no harm to have diversifications.
So, the problems here are:

1. How much Genting sell the power assets? Earn or Lose?
   
2. What Genting want to do with the money? Finance the casino in Sentosa, Singapore? Buy more share on Landmarks? Privatize Resort World? Return to shareholders?

No matter what Genting want to use for the money, I believe that Genting will not sell with loss. I quite happy Genting to have the decision and focus on her hospitality business especially on casino.