Those who want to but missed investing in Genting Malaysia Bhd (GenM) stock shares at a low cost can now do so.
Genting Malaysia share price plunged last August after it declared a related-party exchange (RPT) to buy a 46% stake in loss-making, Nasdaq-recorded Empire Resorts Inc.
Selling pressure in the midst of the Wuhan virus outbreak is seen as a purchasing opportunity, particularly for financial specialists and investors who have visions for a very long-term investment.
Things have gotten better as GenM bounced back to close at RM3.03. The counter had fallen even lower than the RM3 level to close at RM2.94 on Wednesday. It was the lowest Genting Berhad share price since January 2019.
The Genting stock has gone down 9.82% in the course of 3 weeks, clearing out some RM1.87 billion from the GenM’s market capitalisation, which has dropped to RM17.13 billion. However, this decrease is less than the 16% decline over a three-week time frame after the RPT declaration.
Also, its 49.45% parent company, Genting Bhd, went 12.62% to close at RM5.40 last Friday, giving it a market capitalisation of RM20.79 billion.
Genting Malaysia’s sister company, Genting Singapore Ltd, is also affected with its shares going down 8.51%, closing at 86 Singapore cents last Friday.
UOB Kay Hian Malaysia (online stock trading in Malaysia) research head Vincent Khoo says that Genting Malaysia share price today is a “decent price” for investors. After all, they are positive that the “Wuhan virus outbreak can be contained by the second quarter of 2020”.
He considers GenM as “convincing” as the counter is now trading close to the research firm’s trough valuation of RM2.80, offering a planned yield of over 6%.
The group has reported that all tour bookings from China for February have been
cancelled, which means less income from Chinese tourists. Genting Berhad Malaysia said the cancellation was enforced due to international health and safety practices to reduce risk of spreading the Coronavirus COVID-19.
It is said that guests from China made up around 1 million of the 29 million tourists that visited Malaysia last year in 2019.
In any case, in terms of valuation, GenM is right now exchanging at a price-to-earnings ratio (PER) of 9.43 times, which gives off a good impression compared with the the average PER of 12.48x back in 2003.
What’s more, a profit yield of over 6% should tempt investors, compared to yields of under 2% in 2016. Still, this relies on whether a similar payout us maintained throughout the year 2020.