Broker: Maybank Investment Bank Berhad
Date of Report: May 28, 2025
Genting Plantations: Premium Outlet Expansion and Robust Growth Prospects in Indonesia
Genting Plantations’ Strategic Expansion: Next-Gen Premium Outlet Debuts in Jakarta
Genting Plantations Berhad (GENP), a leading upstream oil palm player with additional interests in property development, is making headlines with its latest international venture—a next-generation premium outlet in Jakarta, Indonesia. This ambitious move marks GENP’s first premium outlet outside of Malaysia, underscoring its commitment to diversifying revenue streams and capitalizing on Indonesia’s booming consumer market.
Key Highlights at a Glance
- Share Price (as of report date): MYR 4.86
- 12-month Price Target: MYR 6.99 (+48%)
- Market Capitalization: MYR 4.4 billion (USD1.0B)
- Dividend Yield (FY25E): 5.3%
- Core P/E (FY25E): 13.2x
- Net Gearing (FY25E): 22.8%
Jakarta Premium Outlet: Setting New Retail Standards
The newly launched Jakarta Premium Outlet (JKTPO), a 50:50 joint venture with a local partner, is positioned as a next-generation retail destination. Inspired by Indonesia’s archipelago, the outlet features lush landscaping, water features, and shaded walkways, creating a vibrant and comfortable shopping environment. Key attributes include:
- Strategic Location: Situated in Alam Sutera Township CBD, just 30 minutes south of Soekarno-Hatta International Airport and 45 minutes from central Jakarta, making it easily accessible to both locals and international travelers.
- Scale: Built on 1.0 million sq ft of land, with 0.3 million sq ft of Net Lettable Area (NLA)—comparable to the Johor Premium Outlet (JPO) and slightly larger than Genting Premium Outlet (GPO).
- Leasing Success: 100% of space leased, with 80% of tenants operating as of April. The outlet boasts over 150 global and local brands, including luxury names such as Bally, BOSS, Coach, Furla, Longchamp, Michael Kors, Versace, Swarovski, and the largest Adidas outlet in Southeast Asia.
- Foot Traffic: Attracted approximately 50,000 visitors during Lebaran and now averages 15,000 visitors on weekdays and 20,000 on weekends.
- Discounts: Shoppers enjoy up to 65% off daily, reinforcing its appeal as a value-driven destination.
Financial Performance and Outlook
GENP’s venture into premium outlets continues to deliver strong returns. In FY24, its share of premium outlet profits reached MYR 51 million, accounting for 16% of group core PATMI. With the addition of JKTPO, forecasted contributions are robust:
- FY25E: +MYR 10 million
- FY26E: +MYR 20 million
- FY27E: +MYR 30 million
Given Indonesia’s population of over 281 million, there is significant headroom for further expansion of premium outlets in the country.
Genting Plantations Key Financials (MYR million, FYE Dec)
|
FY23A |
FY24A |
FY25E |
FY26E |
FY27E |
| Revenue |
2,966 |
2,938 |
3,060 |
3,224 |
3,344 |
| EBITDA |
726 |
853 |
846 |
868 |
910 |
| Core Net Profit |
254 |
312 |
330 |
350 |
383 |
| Core EPS (sen) |
28.3 |
34.8 |
36.8 |
39.0 |
42.7 |
| Net DPS (sen) |
21.0 |
25.0 |
25.8 |
27.3 |
29.9 |
| Core P/E (x) |
20.1 |
17.0 |
13.2 |
12.5 |
11.4 |
| P/BV (x) |
1.0 |
1.0 |
0.8 |
0.8 |
0.8 |
| Net Dividend Yield (%) |
3.7 |
4.2 |
5.3 |
5.6 |
6.1 |
| ROAE (%) |
4.8 |
6.1 |
6.2 |
6.4 |
6.9 |
| ROAA (%) |
2.9 |
3.4 |
3.5 |
3.7 |
4.0 |
| EV/EBITDA (x) |
8.6 |
7.7 |
6.7 |
6.5 |
6.2 |
| Net Gearing (%) |
18.8 |
23.5 |
22.8 |
23.0 |
23.0 |
Growth, Profitability, and Efficiency Ratios
Key Ratios (FYE Dec)
|
FY23A |
FY24A |
FY25E |
FY26E |
FY27E |
| Revenue Growth (%) |
(7.0) |
(1.0) |
4.2 |
5.3 |
3.7 |
| EBITDA Margin (%) |
24.5 |
29.0 |
27.6 |
26.9 |
27.2 |
| Pretax Profit Margin (%) |
12.9 |
16.4 |
15.7 |
15.7 |
16.4 |
| Payout Ratio (%) |
74.3 |
69.4 |
70.0 |
70.0 |
70.0 |
| Net Profit Margin (%) |
8.5 |
11.0 |
10.8 |
10.9 |
11.5 |
| ROAE (%) |
4.8 |
6.1 |
6.2 |
6.4 |
6.9 |
| Net Gearing (%) |
18.8 |
23.5 |
22.8 |
23.0 |
23.0 |
| Dividend Cover (x) |
1.3 |
1.4 |
1.4 |
1.4 |
1.4 |
Risk Factors for Investors to Consider
GENP’s earnings outlook and target price are subject to several risks:
- Adverse weather affecting palm oil output
- Lower than expected crude palm oil prices
- Unfavorable import or government policies in Malaysia and Indonesia
- Lower crude oil prices, which can reduce demand for palm biodiesel
- Weaker prices of competing oils, such as soybean and rapeseed
Ownership, Market Position, and Share Performance
GENP is primarily an upstream oil palm producer, also engaged in property development in Malaysia. Key shareholders include:
- Employees Provident Fund (13.4%)
- Kumpulan Wang Persaraan (7.6%)
- Kopernik Global Investors LLC (1.0%)
- Free float: 86.6 million shares
Over the last 12 months, GENP’s share price has seen a relative decline of 20%, and 16% on a relative basis to the Kuala Lumpur Composite Index. The stock, however, is trading at a significant discount to its 8-year mean, with a target price offering a 48% upside.
Historical Analyst Ratings and Target Price Movement
GENP’s analyst ratings have fluctuated between “Hold” and “Buy” over recent years, with target prices typically in the MYR 5.9–7.0 range. The current “Buy” recommendation is supported by expectations for earnings growth, dividend yield, and the positive prospects of the Jakarta Premium Outlet.
Conclusion: Investment Case for Genting Plantations
Genting Plantations stands at a pivotal growth juncture as it leverages its expertise in retail real estate and upstream agriculture to tap into Indonesia’s vast consumer market. The Jakarta Premium Outlet’s successful launch, strategic location, and robust footfall signal strong prospects for future earnings and expansion opportunities. With a solid financial base, attractive dividend yield, and significant upside potential, GENP remains a compelling choice for investors seeking diversified growth in Southeast Asia’s consumer and plantation sectors.
Contact Information
For further inquiries, the following offices and contacts are available:
- Malaysia: Maybank Investment Bank Berhad, 33rd Floor, Menara Maybank, 100 Jalan Tun Perak, 50050 Kuala Lumpur. Tel: (603) 2059 1888
- Singapore: Maybank Securities Pte Ltd, 50 North Canal Road, Singapore 059304. Tel: (65) 6336 9090
- Indonesia: PT Maybank Sekuritas Indonesia, Sentral Senayan III, 22nd Floor, Jl. Asia Afrika No. 8, Jakarta 10270. Tel: (62) 21 2557 1188
- London: Maybank Securities (London) Ltd, PNB House, 77 Queen Victoria Street, London EC4V 4AY. Tel: (44) 20 7332 0221
- Philippines: Maybank Securities Inc, 17/F, Tower One & Exchange Plaza, Ayala Triangle, Makati City. Tel: (63) 2 8849 8888
- India: MIB Securities India Pte Ltd, 1101, 11th floor, A Wing, Kanakia Wall Street, Mumbai City. Tel: (91) 22 6623 2600
- Thailand: Maybank Securities (Thailand) PCL, 999/9 The Offices at Central World, Rama 1 Road Pathumwan, Bangkok 10330. Tel: (66) 2 658 6817
- Vietnam: Maybank Securities Limited, Floor 10, Pearl 5 Tower, 5 Le Quy Don Street, Ho Chi Minh City. Tel: (84) 28 44 555 888
