GENM Plunges 46% Below Offer Price, Vindicating This Analyst’s Exit Call Last Year—Which Stocks Is He Bearish On Now?
Octopaul AI ·
Genting and Genting Malaysia have both suffered sharp share-price declines recently. On October 9, parent company Genting announced plans to raise approximately RM1.25 billion through a rights issue, drawing attention to the group’s debt and funding requirements. On October 12, Genting fell 23% from RM1.88 to RM1.45 in a single session, while Genting Malaysia declined 17% from RM1.49 to RM1.23. As of October 16, the two stocks closed at RM1.45 and RM1.27, respectively.
The sell-off has brought renewed attention to last year’s takeover offer for Genting Malaysia. On 13 October 2025, Genting offered RM2.35 per share, a 9.8% premium to Genting Malaysia’s last closing price of RM2.14 before the announcement. At RM1.27, Genting Malaysia now trades 46% below the offer price.
When the takeover offer was announced last October, CGS International analysts Prem Jearajasingam and Lew Cheng Wei, alongside Hong Leong Investment Bank analyst Chee Kok Siang, recommended that shareholders accept the RM2.35 offer.
Prem and Lew maintained a “Reduce” rating on Genting Malaysia with a target price of RM1.88, placing the offer price 25% above their valuation. Although they recognised the New York casino project’s long-term growth potential, they believed higher operating expenditure and capital requirements could constrain near-term earnings growth and dividends. They therefore viewed the offer as an exit opportunity.
Chee similarly recommended that existing shareholders accept, as the RM2.35 offer represented a 14% premium to his previous target price of RM2.06. He also noted that a potential New York casino licence could unlock additional value, but developing the project would require substantial capital investment.
However, not all analysts supported accepting the offer. Maybank Investment Bank analyst Yin Shao Yang advised shareholders to reject it, arguing that the price did not adequately reflect potential value from the New York casino licence and Miami land. TA Securities analyst Tan Kam Meng also considered the offer unattractive.
The offer closed on 1 December 2025, with Genting’s stake increasing to approximately 73.13%. However, the privatisation was not completed, and Genting Malaysia remained listed. Since then, the New York business’s growth potential has not dispelled market concerns over funding requirements and earnings performance.
With Genting Malaysia falling to RM1.27, subsequent share-price performance has validated Prem, Lew and Chee’s recommendation to accept the offer.
According to StockTipRatings data, Prem Jearajasingam has an expert rating of 50%—the highest among the three analysts who recommended accepting the offer—and a success rate of 37%. Chee Kok Siang has an expert rating of 37% and a success rate of 35%, while Lew Cheng Wei has an expert rating of 33% and a success rate of 17%.
Beyond Genting Malaysia, Prem has also downgraded other stocks ahead of subsequent declines. According to StockTipRatings records, he downgraded Kossan Rubber Industries to “Reduce” on 23 May 2024, with a target price of RM2.07. From that initial downgrade until just before he upgraded the stock to “Add” on 11 August 2026, its share price fell from approximately RM2.25 to RM1.04—a cumulative decline of 53.7%.
Which Stocks Does Prem Remain Bearish On—and Which Has the Greatest Potential Downside?
This is an Elite News article. Upgrade to Elite to read the full content.