Can Genting Malaysia Bhd Survive The New Casino Duties?

On 2 November 2018, Malaysia’s Finance Minister Lim Guan Eng has announced a revision in annual casino license fees from RM 120 million to RM 150 million and a rise of 10% in casino duties from 25% to 35% starting on 1 January 2019.

Subsequently, Genting Malaysia Bhd has experienced a straight tumble in stock price from RM 5.55 to RM 3.58 presently, a 35.5% fall in just a few days.

Source: Yahoo! Finance

Here, I would like to answer two questions:

  1. How to avoid buying shares of Genting Malaysia at RM 5.50 – RM 6.00 recorded throughout 2017 and early 2018?
  2. Is this a good time to grab Genting Malaysia at RM 3.58?

For a start, my answer involves a study on Genting Malaysia’s fundamentals as I want to know whether it is of ‘investment-grade’. Then, I would use a handful of valuation …