"We are performing technical rehearsals for workers and selected guests," a GENM representative said in response to The Edge's email inquiry about the topic on Monday morning.

KUALA LUMPUR (Nov 8): Genting Malaysia Bhd's (GENM) outdoor theme park Genting Skyworlds Theme Park has begun technical rehearsals, bringing it one step closer to opening its doors to the public.

"We are performing technical rehearsals for workers and selected guests," a GENM representative said in response to The Edge's email inquiry about the topic on Monday morning.

This implies that several rides at the outdoor theme park are now open to employees and some tourists.

When asked when the theme park will open to the public and how much tickets will cost, the representative replied that information would be released in due time.

According to gaming analysts, the park will open to the public next month "if all goes well," and tickets "may be priced between RM150 and RM300."

When questioned on Genting Skyworlds, Maybank Investment Bank Research analyst Yin Shao Yang states that on a financial year basis, he anticipates the theme park to draw 3 million visitors, with each visitor spending an average of RM200.

On earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, he assumed 30% or about 10 percentage points higher than Universal Studio Singapore as Genting SkyWorlds will not pay 20th Century Fox gate royalties but a fixed annual license fee.

“These result in a decent RM180 million EBITDA per annum but are not enough to offset RM330 million depreciation per annum (assuming 10% depreciation rate),” he said.

Yet, he expects Genting SkyWorlds to drive Resorts World Genting (RWG) visitor arrivals growth.

"GENM anticipates Genting SkyWorlds to boost RWG visitor numbers to 30 million in the long run, while we are a tad more conservative at 26 million to 27 million per year (pre-Covid-19 high: 24 million)," he added.

Assuming RM150 average mass-market gaming revenue per patron and a 40% EBITDA margin, he estimates that the 2 million to 3 million additional RWG visitors per year above the pre-Covid-19 peak will add RM120 million to RM180 million to EBITDA each year. 

He also opined that this will have positive implications for GENM’s share price in the lead-up to the opening of Genting SkyWorlds in late 2021 even though it is not a casino.

“We studied the share prices of Southeast Asian and Macanese casino companies before their new casinos opened. In an overwhelming 10 of 12 instances, the share prices of the aforesaid casino companies rallied before opening thanks to excitement over the earnings prospects of their new casinos,” he explained.

He maintained a "buy" call on GENM at a target price of RM3.40.

Meanwhile, TA Securities Research analyst Tan Kam Meng said he expects Genting SkyWorlds to be loss-making during the gestation period but will contribute positively to GENM's gaming business.

He expects Genting SkyWorlds to be opened to the public as early as this month and believes the opening has already been priced at the GENM share price.

“Next catalyst would likely be the reopening of the international border or establishment of a travel bubble, which is expected to be in December,” he told The Edge.

While GENM’s FY22 earnings recovery remains intact, he believes its peers listed on Hong Kong's stock exchange offer much decent valuation now.

“As such, we have a "sell" recommendation on GENM (target price: RM3.19) as we expect foreign funds to return to Macau casino operators when the risk of renewing casino license subsides,” he said.

GENM initially planned to launch Genting SkyWorlds in the middle of this year, however, the progress was dragged by the movement control order in the country. Up until February this year, the group had invested over US$800 million into the project. 

Earlier in August, GENM said in a Facebook post that Genting SkyWorlds is in its final stage of development before its opening.

The group also said in a statement in June, the timely completion of Genting SkyWorlds continues to be a key focus.

"While the group continues to work toward the completion of Genting SkyWorld's outdoor theme park in the third quarter of 2021, the park's opening date is reliant on developments around the Covid-19 crisis and its impact [on] the country's leisure and hospitality sector," it stated.

GENM was up two sen, or 0.64 percent, to RM3.15 at the time of writing. It had previously reached an intra-day high of RM3.18.

The counter has risen 17.98% so far this year.