KUALA LUMPUR: Tan Sri Lim Kok Thay and his family have purchased shares in Genting Bhd (KL:GENTING) for the first time in nearly four years, signaling strong support for the struggling stock.
Over the past week, the Lim family acquired 7.26 million Genting shares valued at RM22.86 million. Lim’s private investment firm, Kien Huat Realty Sdn Bhd, bought six million shares, while his son, Keong Hui, purchased an additional 1.26 million shares.
The move comes as Genting shares have dropped by as much as 18% since the release of its financial results in late February. Analysts view the purchases as a sign of confidence in the company’s long-term prospects, with Maybank Investment Bank analyst Samuel Yin Shao Yang upgrading the stock to a “buy,” citing valuations near historic lows.
Prior to this, the Lim family last acquired Genting shares in June 2020. Meanwhile, Datuk Seri Tan Kong Han, set to take over as Genting’s CEO, also invested in the company, purchasing 100,000 shares worth RM341,400 last week.
Following these acquisitions, Genting shares have rebounded from their four-year low on March 5, reducing their year-to-date loss to around 15%. Investors remain cautious over potential dividend cuts, particularly from Genting Malaysia Bhd (KL:GENM), a key subsidiary.
Despite the stock’s struggles, analysts remain largely optimistic, with ten “buy” ratings, three “hold” calls, and no “sell” recommendations. Bloomberg data indicates an average target price of RM4.79, representing a potential 47% upside from its current RM3.26 valuation.
However, some concerns remain. UOB Kay Hian’s head of strategy, Vincent Khoo, noted the absence of minority investor participation, warning that dividend cuts could further deter investors in an already weak market.
Notably, the Lim family and Tan did not purchase shares of Genting Malaysia, which has suffered a 24% share price decline following weaker-than-expected earnings and its removal from the MSCI Malaysia Index. The exclusion, effective February 28, could lead to further fund outflows as passive investors realign their portfolios.
Genting Malaysia has announced a lower dividend payout for 2024 as part of a strategy to conserve cash for expansion efforts. The company’s resorts in New York City may require an estimated US$5 billion for expansion if it secures a downstate casino license, while another US$3 billion may be needed should it obtain a license in Thailand.
Despite the challenges, the recent purchases by the Lim family suggest a belief in Genting’s recovery, with analysts watching closely for further developments.
