Genting Highlands will be closing down its outdoor theme park to make way for the construction of a brand new 20th Century Fox theme park, the first one in the world. The outdoor theme park will be closed for two years, and will re-open in 2016. The theme park is expected to close on 1 September 2013.

Investing around RM400 million in this new project, the theme park by 20th Century Fox will feature 25 movie-based rides and attractions. Earlier in June, Genting Malaysia announced a RM3 billion facelift for the casino resort. The facelift will also include the construction of an additional 1,300 hotel rooms adjoining the First World Hotel.

Despite the closure, Genting is not anticipating a major impact on its revenue despite the fact that its entertainment revenues play a big part in contributing to the group’s finances. According to Hong Leong Investment Bank Research (HLIB), the bulk of Resort World Genting’s revenue is derived from its gaming activities, while only around 5% are from entertainment. HLIB also said that any potential loss from entertainment revenue would likely be offset by the higher-than-expected net wins obtained from the casino in Resorts World New York, where weekly average net wins stand at US$432/Video Lottery Terminal/day – a 14.6% premium to its forecast net wins of US$377. Any risk to performance would come from cannibalisation from Macau and Singapore, appreciation of the ringgit and a rejection of the proposal to operate a full-fledged casino at Resorts World New York.

According to the article, “HLIB Research’s forecasts for Genting Malaysia remain unchanged as it maintains its Hold call with fair valuation at RM4.10 for the stock, currently trading at around RM3.87, with industry rating pegged at Overweight.”

Story and quotes from: The Star Online