The first part of my investment portfolio in which objective is to create wealth to retire.
Stock : Genting SP
Vested in 2006 when Genting SP was involved in bidding for the IR license then. With Singapore Government decided to build 2 IRs then, Genting SP with the experience in Genting Malayisa was one of the bidder for the Sentosa IR ( the other IR in Marina was won by Las Vagas Sand ). Bought into Genting SP before they were being announced as the winner of the Sentosa IR. Reason being the concept in which Genting SP proposed for the IR ( family-oriented with a Universal Studio Theme Park just blend well with the existing Sentosa Island ) to me was a "sure winner" as compared with other competitors. Also the IR concept in Singapore basically cannot fail for the Government and hence to me the IR operator will have a sort of safety net. First bought at $0.38 and subsequently Genting SP has a series of rights issue at price $0.80 and $0.60 in which all I have subscribed to. As of now, my holding average price for Genting SP stands at $0.5314.
Potential Upside :
Singapore with a good geographical location is relying on tourism as part of its economy growth. The existence of the IR has elevated Singapore reliance on consumer spending to another level. Genting IR consists of casino, Universal Studio Theme Park, Hotel, shopping/dining facilities, Marina Life Park, Maritime Experiential Museum & Aquarium and events venue to contribute to its revenue. This has differ from the traditional casinos around this region ( Macau, Malaysia and Australia ). The casino is to attract both the high rollers and tourists while the other facilities very well suited for family-oriented visitors. With the reference of casino in Macau, the casino business is very hard a losing business in the long run. As long as Singapore still reliance on its tourism for economy growth ( which Singapore has to and must to ), the IR in Singapore should not be a losing business.
Potential Downside :
According to Singapore law, Singapore citizens have to pay an entrance levy of $100/day in order to enter the casino and hence, the drawback on that will be shortage of visitor to the casino from the locals. Another downside would be the competition within and around the region on its casino business. Local competitor comes from Marina Bay Sands while around the region is from Macau, Malaysia and Australia, or potential more from other countries if they decide to build one. Should Genting SP fail to maintain its combativeness, its revenue will take a hit.
Personal Expectation :
At the moment Genting SP still yet to breakeven from the loan it took to build the IR from its earning. Any valuation expectation could only be judged once Genting SP starts to breakeven. Thereafter, the annual profit should provide a good barometer of the valuation of Genting SP. Will be looking out for fundamental change or saturation of business when the management fail to maintain its combativeness and perhaps that will be the time to divest out based on fundamental reason. Presently, Genting SP is considered a "growth stock" to me.
Genting Singapore
Resort World Sentosa
