PP16832/01/2012 (029059)

Malaysia
Company Update

2 December 2011

Genting Plantations

Sell (unchanged)

Premium outlet next door

Share price:
Target price:

RM8.13
RM6.70 (unchanged)

New shopping experience. Johor Premium Outlet (JPO), the first

premium outlet in the ASEAN region, started its pre-launch sales
yesterday, featuring a combination of 69 brands and F&B outlets.
However, we observe certain hiccups that can be overcome over time.
We expect <5% impact on GENPs earnings from the JPO. Maintain
Sell as GENP trades at relatively rich valuation of 17.5x 2013 PER. Our
TP is unchanged at RM6.70, pegged at 14.5x 2013 PER.

Ong Chee Ting, CA

ct.ong@maybank-ib.com
(603) 2297 8678
Chai Li Shin
lishin.c@maybank-ib.com
(603) 2297 8684

Smooth pre-launch of JPO on 1 Dec 2011, with 55 brands outlets

opened to bargain hunters, while six remaining shops will be opening
soon. Products offered in JPO comprise women, men and children
clothing, sportswear, footwear, bags, accessories, and skincare to cater
to different customer demand. These offseason fashion items, largely
from US, Malaysia and Singapore, are mostly not more than two years
old and discount ranges between 15-70%. On top of that, retailers offer
further discounts or special gifts to encourage splurging.

Stock Information
Description: Upstream plantation player, with small
exposure to property and biotechnology.
(Planted land in 2010 = 87,676 ha)
Ticker:
Shares Issued (m):
Market Cap (RM m):
3-mth Avg Daily Volume (m):
KLCI:
Free float (%):

GENP MK
758.8
6,169.4
0.63
1,485.26
32.4

Major Shareholders:
Genting Bhd
EPF

%
53.4
14.1

GENP MK Equity

8.0
6.0
4.0

Genting Plantations Summary Earnings Table

2.0

FYE Dec(RM m)
Revenue
EBITDA
Recurring Net Profit
Recurring Basic EPS (Sen)
EPS growth (%)
DPS (Sen)

0.0
Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11

Performance:
52-week High/Low

Absolute (%)
Relative (%)

Room for improvement. JPO could face challenges in attracting

foreign tourists as the designer brands offered seems fewer compared
to other premium outlets. Lack of cooling fans outdoor could also cause
discomfort to customers with Malaysias hot and humid weather.
Exhausted shoppers also hardly find seats in the open area to rest.
Muted short term earnings impact. Aside from luring bargain hunters,
JPO could also leverage on visitors to Iskandar and Singapore due to
its close proximity. The development of Iskandar region, especially the
Legoland Theme Park, could boost JPOs customer traffic further.
However, JPO has a marginal (<5%) impact on GENPs earnings in the
short run, we estimate. There is also a risk in the longer term since two
more premium outlets may be built in Malaysia by 2020, under the ETP.

Historical Chart
10.0

More to come? Besides the eight F&B outlets in JPO, construction of a

food court is in progress since the restaurants would be insufficient to
accommodate a full crowd and there is currently lack of quick bites
option. Going forward, JPO could boost revenues by organizing special
sales such as Black Friday sales and midnight madness sales that were
offered by premium outlets in the other countries.

RM9.09/RM6.55

1-mth

3-mth

6-mth

1-yr

YTD

9.9
9.2

3.6
8.2

(3.8)
(1.5)

(4.9)
(4.9)

(7.6)
(5.4)

PER
EV/EBITDA (x)
Div Yield (%)
P/BV(x)
Net Gearing (%)
ROE (%)
ROA (%)
Consensus Net Profit (RM m)

Source: Maybank IB
2012F
2013F
958.1
997.1
467.8
471.2
345.1
351.3
45.5
46.4
(21.6)%
1.8%
8.7
8.8

2009A
755.6
314.4
235.7
31.1
(36.9)%
9.0

2010A
988.6
452.3
373.5
49.3
58.5%
12.5

2011F
1,082.6
603.3
432.2
57.0
17.8%
11.0

25.8
18.0
1.1
2.4

16.5
12.7
1.5
2.4

14.3
9.4
1.4
2.1

17.9
11.7
1.1
1.9

17.5
11.4
1.1
1.8

NA
9.6%
8.7%
-

NA
14.7%
13.0%
-

NA
16.1%
14.4%
454.4

NA
11.3%
10.2%
438.7

NA
10.6%
9.6%
491.6

Kim Eng Hong Kong is a sub sid iar y of Malayan B anking B erh ad

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Genting Plantations

Other highlights
1/3 of EPP3 of Tourism NKEA achieved. The Entry Point Project
(EPP) 3 under the Tourism National Key Economic Area, proposes to
establish three premium outlets in Malaysia by year 2020 as one the
Economic Transformation Programmes (ETP) target to rev up
Malaysias tourism industry. Johor Premium Outlet is one of the three
targeted premium outlet that aims to cater to tourist arrivals into
Iskandar. Meanwhile, shoppers could look forward to two additional
premium outlets planned to be built in Sepang and Penang
respectively. Although they would cater to tourist arrivals in different
places, JPO could see competition ahead.
Ease of access. JPO is easily assessable by car since it is merely 15
minutes drive from Senai Airport, 45 minutes from Johor Bahru, 1 hour
from Singapore downtown and 3 hours from Kuala Lumpur. Dedicated
bus services from various locations (including from Senai Airport) are
also available, catering to JPOs shoppers. There is abundance of
parking spaces as well. Security systems are also intact with a police
base inside JPO itself to provide a safe shopping experience. The only
bank with a presence in the JPO is Maybank.
Designer Fashions & Sportswear

Adidas, Armani Exchange, Armani Outlet,

Burberry, Canali, CK Calvin Klein, Cotton On,

DKNY, Esprit, Flow, G2000, Gap, Guess,

Lacoste Outlet, La Senza Lingerie, Levis Outlet Store,

Nike Factory Outlet, Padini Outlet Store, Pink Jambu, Poney Outlet, Puma,

Quiksilver, Raoul, Rip Curl, Roxy,

Salvatore Ferragamo Company Store, Shanghai Tang,

Timberland, Universal Traveller, Zegna Outlet Store.

Opening soon: Brooks Brothers, Polo Ralph Lauren, Tommy Hilfiger, Versace .
Shoes

Charles & Keith Reductions, Clarks, Geox, Pedro Outlet, Skechers, Vincci.

Accessories & Jewellery

City Chain, Evita Peroni.

Opening soon: Swiss Watch Gallery, Tomei, Wear+When.

Fine Leather & luggage

Bonia, Carlo Rino, Coach, Coach Mens,

Fossil, Michael Kors, Oroton Factory Outlet,

Samsonite Factory Outlet, Tumi.

Gift & Specialty items

Cosmetics & Designer Fragrances, Fidani Chocolate,

Maybank, Royal Selangor, The Body Shop Outlet.

Opening soon: The Cosmetics Company Store.

Housewares & Home Furnishings

Akemi Uchi.

Food & Beverages

2 December 2011

Absolute Thai, Baskin-Robbins, Crispy Crepe, George & Dragon Caf,

Kampachi Japanese Restaurant, Taang Shifu

The Coffee Bean & Tea Leaf, Starbucks Coffee.

Page 2 of 8

Genting Plantations
Spacious walkways

Food court (construction in progress)

Source: Maybank-IB

Source: Maybank-IB

Huge parking space

Children playground

Source: Maybank-IB

Source: Maybank-IB

External landscape

Police base and ATM machines

Source: Maybank-IB

Source: Maybank-IB

2 December 2011

Page 3 of 8

Genting Plantations
Burberry

Salvatore Ferragamo

Source: Maybank-IB

Source: Maybank-IB

Michael Kors

Coach

Source: Maybank-IB

Source: Maybank-IB

Brooks Brothers (opening soon)

Wear + When (opening soon)

Source: Maybank-IB

Source: Maybank-IB

2 December 2011

Page 4 of 8

Genting Plantations
JPO signboard

Source: Maybank IB

JPOs shops directory

Source: Johor Premium Outlet website

2 December 2011

Page 5 of 8

Genting Plantations

INCOME STATEMENT (RM m)

FYDec

BALANCE SHEET (RM m)

2010A

2011F

2012F

2013F

Revenue
EBITDA
Depreciation & Amortisation
Operating Profit (EBIT)
Interest (Exp)/Inc
Associates
One-offs
Pre-Tax Profit
Tax
Minority Interest
Net Profit
Recurring Net Profit

988.6
452.3
(32.7)
419.7
15.1
5.0
0.0
439.7
(64.0)
(2.3)
373.5
373.5

1,082.6
603.3
(32.9)
570.4
9.8
5.3
8.0
585.5
(143.1)
(2.3)
440.2
432.2

958.1
467.8
(33.2)
434.6
12.2
12.3
0.0
459.1
(111.7)
(2.3)
345.1
345.1

997.1
471.2
(33.5)
437.7
14.8
14.3
0.0
466.8
(113.1)
(2.3)
351.3
351.3

Revenue Growth %
EBITDA Growth (%)
EBIT Growth (%)
Net Profit Growth (%)
Recurring Net Profit Growth (%)
Tax Rate %

30.8%
43.9%
45.8%
58.5%
58.5%
14.5%

9.5%
33.4%
35.9%
17.9%
15.7%
24.4%

(11.5)%
(22.5)%
(23.8)%
(21.6)%
(20.1)%
24.3%

4.1%
0.7%
0.7%
1.8%
1.8%
24.2%

CASH FLOW (RM m)

FYDec

2010A

2011F

2012F

2013F

Fixed Assets
Other LT Assets
Cash/ST Investments
Other Current Assets
Total Assets

1,802.9
175.5
498.3
390.9
2,867.6

1,937.4
178.2
617.0
496.9
3,229.5

2,104.9
187.9
745.3
472.9
3,511.0

2,267.8
199.5
841.0
498.5
3,806.9

ST Debt
Other Current Liabilities
LT Debt
Other LT Liabilities
Minority Interest
Shareholders' Equity
Total Liabilities-Capital

2.0
147.5
66.1
36.8
67.1
2,548.1
2,867.6

2.0
153.8
66.1
36.8
66.4
2,904.5
3,229.5

2.0
156.5
66.1
36.8
65.6
3,183.9
3,511.0

2.0
168.7
66.1
36.8
64.9
3,468.4
3,806.9

Share Capital (m)

Gross Debt/(Cash)
Net Debt/(Cash)
Working Capital

757.3
68.1
(430.1)
739.6

757.9
68.1
(548.9)
958.1

757.9
68.1
(677.2)
1,059.7

757.9
68.1
(772.9)
1,168.8

FYDec

2010A

2011F

2012F

2013F

EBITDA Margin %
Op. Profit Margin %
Net Profit Margin %
ROE %
ROA %
Net Margin Ex. El %
Dividend Cover (x)
Interest Cover (x)
Asset Turnover (x)
Asset/Debt (x)
Debtors Turn (days)
Creditors Turn (days)
Inventory Turn (days)
Net Gearing %
Debt/ EBITDA (x)
Debt/ Market Cap (x)

45.8%
42.5%
37.8%
14.7%
13.0%
37.8%
3.9
NA
0.3
42.1
61.6
116.2
122.3
NA
0.2
0.0

55.7%
52.7%
40.7%
16.1%
14.4%
39.9%
5.3
NA
0.3
47.4
87.0
140.0
155.0
NA
0.1
0.0

48.8%
45.4%
36.0%
11.3%
10.2%
36.0%
5.3
NA
0.3
51.5
88.0
140.0
155.0
NA
0.1
0.0

47.3%
43.9%
35.2%
10.6%
9.6%
35.2%
5.3
NA
0.3
55.9
89.0
140.0
155.0
NA
0.1
0.0

RATES & RATIOS

FYDec

2010A

2011F

2012F

2013F

Profit before taxation

Depreciation
Net interest receipts/(payments)
Working capital change
Cash tax paid
Others (incl'd exceptional items)
Cash flow from operations
Capex
Disposal/(purchase)
Others
Cash flow from investing
Debt raised/(repaid)
Equity raised/(repaid)
Dividends (paid)
Interest payments
Others
Cash flow from financing
Change in cash

439.7
32.7
(15.1)
0.0
(47.8)
(202.6)
206.9
(204.3)
(6.8)
(36.1)
(247.2)
0.0
2.0
(49.7)
56.5
(3.1)
5.7
(34.5)

585.5
32.9
(9.8)
0.0
(143.1)
(102.4)
363.2
(167.4)
0.0
0.0
(167.4)
0.0
0.0
(83.7)
9.8
(3.1)
(77.0)
118.8

459.1
33.2
(12.2)
0.0
(111.7)
17.1
385.5
(200.7)
0.0
0.0
(200.7)
0.0
0.0
(65.7)
12.2
(3.1)
(56.5)
128.3

466.8
33.5
(14.8)
0.0
(113.1)
(25.1)
347.3
(196.5)
0.0
0.0
(196.5)
0.0
0.0
(66.8)
14.8
(3.1)
(55.1)
95.7

Source: Company, MaybankIB

2 December 2011

Page 6 of 8

Genting Plantations

APPENDIX 1
Definition of Ratings
Maybank Investment Bank Research uses the following rating system:
BUY
HOLD
SELL

Total return is expected to be above 10% in the next 12 months

Total return is expected to be between -5% to 10% in the next 12 months
Total return is expected to be below -5% in the next 12 months

Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investm ent ratings are
only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not
carry investment ratings as we do not actively follow developments in these companies.

Some common terms abbreviated in this report (where they appear):

Adex = Advertising Expenditure
BV = Book Value
CAGR = Compounded Annual Growth Rate
Capex = Capital Expenditure
CY = Calendar Year
DCF = Discounted Cashflow
DPS = Dividend Per Share
EBIT = Earnings Before Interest And Tax
EBITDA = EBIT, Depreciation And Amortisation
EPS = Earnings Per Share
EV = Enterprise Value

FCF = Free Cashflow

FV = Fair Value
FY = Financial Year
FYE = Financial Year End
MoM = Month-On-Month
NAV = Net Asset Value
NTA = Net Tangible Asset
P = Price
P.A. = Per Annum
PAT = Profit After Tax
PBT = Profit Before Tax

PE = Price Earnings
PEG = PE Ratio To Growth
PER = PE Ratio
QoQ = Quarter-On-Quarter
ROA = Return On Asset
ROE = Return On Equity
ROSF = Return On Shareholders Funds
WACC = Weighted Average Cost Of Capital
YoY = Year-On-Year
YTD = Year-To-Date

Disclaimer
This report is for information purposes only and under no circumstances is it to be considered or intended as an offer to sell or a solicitation
of an offer to buy the securities referred to herein. Investors should note that income from such securities, if any, may fluctuate and that each
securitys price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental
ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on
price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.Accordingly, investors may
receive back less than originally invested. Past performance is not necessarily a guide to future performance. This report is not intended to
provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the
particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding
the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.
The information contained herein has been obtained from sources believed to be reliable but such sources have not been indepe ndently
verified by Maybank Investment Bank Berhad and consequently no representation is made as to the accuracy or completeness of this report
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2 December 2011

Page 7 of 8

Genting Plantations

APPENDIX 1
Additional Disclaimer (for purpose of distribution in Singapore)
This report has been produced as of the date hereof and the information herein maybe subject to change. Kim Eng Research Pte Ltd
("KERPL") in Singapore has no obligation to update such information for any recipient. Recipients of this report are to contact KERPL i n
Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor,
expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), KERPL sh all be legally
liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.
As of 2 December 2011, KERPL does not have an interest in the said company/companies.

Additional Disclaimer (for purpose of distribution in the United States)

This research report prepared by Maybank Investment Bank Berhad is distributed in the United States (US) to Major US Institutional
Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Kim Eng Securities USA, a brokerdealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended).
All responsibility for the distribution of this report by Kim Eng Securities USA in the US shall be borne by Kim Eng. All resulting transactions
by a US person or entity should be effected through a registered broker-dealer in the US.
This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not
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that Kim Eng Securities is permitted to provide research material concerning investments to you under relevant legislation and reg ulations.
Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may app ly if the reader is
receiving or accessing this report in or from other than Malaysia.
As of 2 December 2011, Maybank Investment Bank Berhad and the covering analyst does not have any interest in in any companies
recommended in this Market themes report.
Analyst Certification:
The views expressed in this research report accurately reflect the analyst's personal views about any and all of the subject securities or
issuers; and no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations
or views expressed in the report.

Additional Disclaimer (for purpose of distribution in the United Kingdom)

This document is being distributed by Kim Eng Securities Limited, which is authorised and regulated by the Financial Services Authority and
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Published / Printed by

Maybank Investment Bank Berhad (15938-H)

(A Participating Organisation of Bursa Malaysia Securities Berhad)
33rd Floor, Menara Maybank, 100 Jalan Tun Perak, 50050 Kuala Lumpur
Tel: (603) 2059 1888; Fax: (603) 2078 4194
Stockbroking Business:
Level 8, Tower C, Dataran Maybank, No.1, Jalan Maarof 59000 Kuala Lumpur
Tel: (603) 2297 8888; Fax: (603) 2282 5136
http://www.maybank-ib.com

2 December 2011

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