On Friday, Citi reaffirmed its Buy rating on Genting Bhd (GENT:MK) (OTC: GEBHY (OTC:GEBHY)) stock with a steady price target of MYR5.55. The endorsement follows the company's recent agreement on an Engineering, Procurement, Construction, Installation, and Commissioning (EPCIC) Contract, which was signed shortly after a significant trade event.
The event was a luncheon organized by the Ministry of International Trade and Associated Chinese Chambers of Commerce and Industry of Malaysia, marking the 50th anniversary of diplomatic relations between Mainland China and Malaysia, and attended by Chinese Premier Li Qiang.
Citi's analysis suggests that Genting's latest contract signing is indicative of a strong relationship with the Malaysian government. According to the firm, the new transactions presented by Genting are not expected to significantly increase the company's financial leverage. Citi's position reflects confidence in Genting's valuation, noting that the stock is trading at approximately a 30% discount to its net asset value (NAV) and is below the historical mean by around one standard deviation.
The trading of Genting shares was paused at 16:20 local time on June 20, 2024. This suspension allowed for the market to digest the news of the EPCIC Contract and its implications for the company. Trading is scheduled to resume at 09:00 local time on June 21, 2024.
Investors and market watchers will be keeping a close eye on Genting's stock performance as trading recommences. The company's solid ties with the government and its current valuation may influence investor sentiment and market movements in the near term.
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