Still relevant and attractive?
Emmanuel Samarathisa | 03 May 2019 00:30
Many listed Chinese family businesses have long stamped their presence on the Malaysian economy with their business acumen and strong connections. But are these once-sought-after blue chips or “old money” as some call them, still relevant in the “new” economy which is being driven by an insatiable appetite for unicorns, or technology start-ups valued north of US$1 bil, and government-linked companies (GLCs)?
Consider Genting Bhd, the main listed company of the Genting Group. Founded in 1965 by the late Tan Sri Lim Goh Tong, the company’s major revenue driver is its casino business. In the 80s, Genting was one of the fastest-growing companies and by 1995, the group’s turnover was RM2.5 bil with pre-tax profit of RM1.09 bil, making it among the country’s largest corporate taxpayers. In fact, according to Bloomberg data, if an investor had held a Genting share since Feb 1, 1987, he or she will see a total return of 1,192% on that stock! But while that sounds lucrative for the 80s investor, younger ones who, say, purchased the stock after the global financial crisis of 2008-09 on Jan 1, 2010 would have to deal with a total loss of 21.68%.
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