And so Genting Malaysia announced its 4th RPT last night.
Snippet from CIMB report:
- What We Think
At first glance, the news of yet another RPT by Genting Malaysia is negative. Although Genting Malaysia expects to reap cost savings from the acquisition as it is E-Genting’s largest customer, the RPT might not sit well with investors. This is the fourth RPT in four years, the others being Walker Digital, Wisma Genting and Genting UK.
However, we take comfort in 1) the size of the acquisition, which is small at 3% of net cash and 0.4% of total shareholders’ funds, 2) fair pricing of 5.2x P/E and 2.0x P/BV for E-Genting, and 3) the profitability of E-Genting’s business. Genting Malaysia also accounts for close to 80% of E-Genting’s revenue. Ascend International only has minimal operations at this juncture.
What You Should Do
Any share price weakness from this news should be viewed as an opportunity to accumulate the stock. Genting Malaysia’s defensive earnings and strong operating cash flow are appealing in uncertain times like these.
It's the 4th RPT lah.
When will Genting Malaysia respect its minority shareholders and stop all these Related Party Transactions (RPT) nonsense?
Is it so difficult to respect?
CIMB said '.. we take comfort in 1) the size of the acquisition, which is small at 3% of net cash '
Gosh! This deal is worth 50 million ringgit. Is 50 million ringgit small? WTH? And how could CIMB insult the intelligence of its readers by comparing it versus the 'net cash'?
50 million ringgit is 50 million ringgit is 50 million ringgit!
And the last part... it's advice "What You Should Do - Any share price weakness from this news should be viewed as an opportunity to accumulate the stock.'
Oh yeah, as usual any share price weakness is an opportunity to accumulate the stock... but just what kind of stock is one accumulating? What kind of company is this? Does the investor looks smart investing in a company who only does nothing but RPTs? Does it make sense?
And if the minority does nothing, such transactions will keep on happening over and over and over again.
- 9 Dec 2009: Genting Malaysia Buys Properties From Genting Bhd
- 16 Dec 2009: MSWG Slams Genting Malaysia For Its RPT Land Deal!
- 2 Jul 2010: Genting Malaysia's UN Fortunate Entry Into UK Casino Business
- 25 Aug 2010: Shame On The 60.39% Who Voted For Genting Malaysia's UK Casino Purchase