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Thursday, October 28, 2010

Learning from history Genting Berhad 2 year performance

The World Financial Crisis did rattle many stocks and Genting Berhad, mother stock of Genting Singapore, did experience a downturn during that period and also surprisingly another short period durng April 2009 when it was down to only MYR3.20. That translate to about SGD$1.42.

Within two years, Genting Berhad now is trading over MYR10.00 (SGD4.44) or a tremendous gain of 312%

Should this be an indicator of the trend that Genting Singapore could be heading? There are many analysis and predictions for the expected Target Price of Genting Singapore. So this take here is based on not only trend of the mother stock but also plain fundamentals.

Genting Berhad in the old days took 3 years to build the access road up to the mountain to start the building of the resort, hotel and casino. It was estimated to take over 10 years. Very impressive but still no revenue for those 3 years and another few years more to complete the buildings.

Now fast forward to Genting Singapore. The whole resort(apart from a few other sections) is completed and running and making profit in 3 years. And at current revenue estimates, the whole cost of the resort could be paid off in 3-5 years.

One of my earlier articles projected $2.50. My other article suggested about $4.00. So with this article, it is quite solid and possible the price could be in the range of  $2.50 to $4.00 in 2 years.

Comments and suggestions welcome.

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