KUALA LUMPUR: Genting Bhd is not going to spin off its power assets for public listing, as it deems now is not the right time for such a corporate exercise.

During the group’s annual general meeting (AGM) yesterday, chairman-cum-chief executive Tan Sri Lim Kok Thay told shareholders that Genting (fundamental: 2.1; valuation: 0.8)’s power assets have not built up enough capacity yet.

“Only when the market is right, and [when] we have the right capacity, then we can consider an IPO (initial public offering),” he said.

Genting is currently constructing a 660 megawatt (mw) coal-fired power plant in Banten, Java, Indonesia, which is slated for completion in early 2017. In China, the group is developing a new 2X1,000mw ultra-supercritical coal-fired power plant in Putian, which is expected to be completed in the second half of 2016.

In August 2012, Genting sold its 720mw gas-fired combined cycle power plant in Kuala Langat, Selangor, to debt-laden 1Malaysia Development Bhd for RM2.3 billion cash.

Through its 97.7%-owned subsidiary Genting Sanyen (Malaysia) Sdn Bhd, Genting also sold its 3.21 million sq ft freehold and leasehold industrial land in Kuala Langat where the power plant is located for RM38.8 million.

On the oil and gas (O&G) front, Lim told shareholders that the group’s production cost is very low, hence the business is still considered “sustainable” even at the present low oil prices. Brent crude was trading above US$65 per barrel yesterday, almost half the US$113.02 per barrel prices seen about a year ago.

The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. 

This article first appeared in The Edge Financial Daily, on June 12, 2015.