The Better Business: Genting Malaysia Bhd vs. Genting Singapore PLC

Singapore-listed Genting Singapore PLC (SGX: G13) is managed and majority-owned by the Malaysia-listed conglomerate, Genting Berhad (KLSE:3182.KL).

The business that kicked-start Genting Berhad’s empire is something many Singaporeans are likely familiar with – the resorts and casinos in Genting Highlands in Malaysia.  Now, the resorts are no longer directly owned by Genting Berhad. Instead, they’re a part of Genting Malaysia Bhd (KLSE:4715.KL), a sister company to Genting Singapore and a Malaysia-listed company that’s also majority owned by Genting Berhad.

Both Genting Singapore and Genting Malaysia are focused on the gaming business.

At the moment, Genting Singapore’s flagship asset is in Singapore, the Resorts World Sentosa. The company’s also building a new integrated resort in South Korea’s Jeju Island.

Meanwhile, Genting Malaysia generates most of its revenue from its flagship assets in Malaysia but has sizable operations in the United Kingdom and the Americas too. In addition, Genting Malaysia has a 16.9% stake in Genting Hong Kong Limited (SGX: S21).

Given that Genting Singapore and Genting Malaysia are similar, it may be interesting to find out which has the stronger business. Let’s find out.

Size and profitability

In terms of revenue, Genting Malaysia is slightly larger. It had revenue of RM8.4 billion (S$2.77 billion) in 2015 as compared to Genting Singapore’s S$2.40 billion.

Because of a huge drop in profit in Genting Singapore in recent years, Genting Malaysia is also more profitable. In 2015, the latter had net profit of RM1.24 billion (S$415 million) while the self-same figure for the former was just S$75.2 million. But, just a year ago in 2014, Genting Singapore had managed to earn a net profit of S$517 million.

Financial stability

Both companies have very strong balance sheets as they are in net-cash positions.

That being said, Genting Malaysia has been spending lots of funds on capital expenditures over the past few years, partly due to the redevelopment of Resorts World Genting. If the level of capital expenditure continues, the company might need to take on more debt and thus weaken its balance sheet. For perspective, Genting Malaysia had spent a total of RM5.74 billion in capex from 2013 to 2015. At the end of 2015, the company had RM5.1 billion in cash and short-term investments and RM4.6 billion in total debt.

While Genting Singapore also has to spend capital for the development of its Jeju Island project, it’d appear that the company has sufficient resources to handle the estimated costs of S$2.4 billion. In 2015, Genting Singapore had generated S$1.26 billion in operating cash flow and spent just S$174 million on capex. Moreover, the firm also ended the year with S$5.0 billion in cash and equivalents and just S$1.6 billion in debt.


At its current share price of RM4.32, Genting Malaysia is valued at 20 times its trailing earnings. Genting Singapore on the other hand, has a trailing price-to-earnings (PE) ratio of more than 100 at its share price of S$0.79 at the moment. It should be noted though that Genting Singapore’s sky-high PE is caused by the sharp drop in its profit in 2015.

A Foolish Summary

To sum it up, Genting Malaysia is the bigger, more profitable, and cheaper stock of the two. Meanwhile, Genting Singapore is the one with the better balance sheet.

What I’ve shared can be useful as a starting point for deeper research, but they should not be taken as the final word on the investing merits of the two gaming stocks. In any case, which of the two companies in the Genting family do you think will be a better investment for the future? You can discuss this in the comments section below.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim doesn’t own shares in any companies mentioned.