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Monday, October 4, 2010

Genting Malaysia rising in tandem with Genting Singapore

Genting Malaysia has been rising in tandem with Genting Singapore. From a long average range trading of $2.70 to $2.85 for over 1 year, now it has risen to over $3.40. Price was on an automated computerised buy-in high of $3.60 and went down slightly after the dividend (XD). And now on a equal climb with Genting Singapore.

Today, I am at Genting Highlands Resorts. Staying in the Highland Hotels, Level 9 of the Premier section. The interior has been upgraded once again. Very clean facilities. Very super fast lifts / elevator to shuttle impatient punters out of their hotel rooms into the casino tables. Staff have high morale. Salary here is much higher than elsewhere in Malaysia. Staff have their own residences and staff meal coupons. You have no place to "waste" your money. Just work, get paid, save, no worries about place to stay, rent, nor food. Happy employees means productive and dedicated employees. Policemen everywhere. They seem so much more professional and happier to give a smile than elsewhere too. Security is a top. The dining courts, restaurants, Maxims, Good Friends Restaurant, McDonalds, Marry Brown, Hainan Kitchen, are all packed with consumers. The slot machines ate 100 RM and then 50 RM. Then another 100 RM.

There are competitions and lucky draw for a BMW car (top prize) in celebration of 45th Anniversary of Genting Highlands. Veteran punters are approached by courteous staff, and being offered a free two nights stay at the hotel for the next trip that must be used within 2 months period (bar peak period). Just by checking your Genting Card and Genting Points accumulated for the day. On average, I think you can earn 1 Genting Point for "using" 50 RM for a span of 30 minutes or so. Yes there's another promotion! If you obtained 3 GP (Genting Points) within a day, you get a FREE COMBO MEAL coupon at 4-5 of the participating restaurants - like Fortune Corner, Hainan, and a few others. PLUS you stand a chance to win the car.

Cross marketing, and market segmentation is at its best. Veterans, retired citizens, who have slogged for years working and now have freedom of travel time (weekdays, non peak, non public holiday) are more often than not being offered the free room special. In proviso, you have to book it within a designated time frame. A trip to Genting Highlands for 2 person will consists of travelling expenses, meals, and casino budget. Say a low casino budget of 100 RM per day. You will be spending 2 days or 1 night, so 200 RM budget. Food is pricy at average of 20 RM per meal. 200 + 80 = 300 RM. For a very low budget person. And usually people travel as a team, a couple, old friends, so 2 person minimum. That's 600 RM into the Revenue of Genting Malaysia's balance sheet. You can bet that "normal and regular punters" will have a bigger casino budget, say 200 RM to 500 RM per day.

So that free hotel stay, means another 600-1000 RM coming in. On non-peak periods. My parents have 400-500 Genting Points. Based on my 50 RM "usage" theory, they have spent 50 RM x 400 = 20 000 RM over a course of 5 years. Average of 4000 RM per year. So yes, 1000 RM per trip. Multiply that with the veteran membership numbers (any Genting personnel can supply this figure or any actuarial estimate?) Basically the so called "non peak" period is covered solid. The bus companies too are subsidised by Genting Malaysia to have a "fair" fare for customers.

At the Galleria, a museum to showcase the roadmap of Genting's founder Lim Goh Tong - and vision of the place. 45 years ago. The startup phase was difficult. The road, literally The Long And Winding Road as sang by The Beatles. Perhaps his favourite song? Took 4 years to build the access road to the mountain top. Basically zero profit for building a road. So zero profit for 4 years. Then I look at the graph and charts, the first 10 years or so very slow. And then exponential growth. Then 97, then 2008. There are charts to show the stock value and nett profit. Compounded Average Growth Rate is a remarkable 20%. Therefore, perhaps you may want to think it is terms of a fixed deposit with 20% per annum interest rate. Some years would have had 30%, 40% growth. So think of say an average sum of $10 000 with 20% interest and keep it for 45 years. The answer: _____

So for those who thought they might have missed the boat buying Genting Singapore, Genting Malaysia is always here. The price converted to Singapore dollars is about 4.25 / 2.25 = $1.88 Singapore Dollars. Besides holding both stocks covers both economies or both market and part of diversification.

The clouds are coming again. It is cold. Weather up here is uncertain. It is raining now. One thing certain is your company's profit here. Yes your company - you are the shareholder, yes?

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