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The lawsuits against Walt Disney Co and Twenty-First Century Fox for breach of contract for the Fox theme park at Genting Highlands are likely to affect visitor arrivals.
"We believe that court proceedings will take time and that, in the meantime, the opening of the theme park may be further delayed," PublicInvest research said.
The research house reduced its visitor arrivals growth rate for the 19-20th F by 8-9% to 3%, resulting in a 9-16% reduction in revenue forecasts.
"We also attributed a lower PE multiple to gaming operations in Malaysia in our SOTP assessment (14 to 9 times), because of the uncertainties surrounding its GITP project," he said.
PublicInvest maintained its underperformance at the box office with a revised target price of 2.70 RMB, compared to 4 RMD previously.
The research firm said that if Genting Malaysia wins and receives $ 1 billion in compensation, Genting's integrated tourism plan would remain in limbo without a key attraction.
"In our opinion, looking for another form of intellectual property licensing would be a challenge," he said.
PublicInvest added that there was a potential risk of loss of promissory notes issued by Genting Malaysia for the development of an integrated resort resort by the Mashpee Wampanoag tribe in the United States.
"Its total investment (including accrued interest) in promissory notes was $ 426.3 million (or RMB 1.8 billion) as at June 30, 2018. The Department of the Interior of United States is currently reviewing the rights of the tribe on the land, subject submitted and adopted in the US Congress. "
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