Genting unit aims for Nasdaq listing, UOBKH positive

By Xavier Kong

Genting Bhd’s Singapore-based subsidiary TauRx, of which Genting owns 20.7% as the largest shareholder, is eyeing a listing on Nasdaq with an initial public offering valued at about US$15 billion (RM65.1 billion) in 2017. UOB Kay Hian noted that, should the listing go through, Genting stands to gain in value.

“Should the initial public offering materialise at a US$15 billion valuation, Genting’s stake would be worth RM13.6 billion, representing 29% of our current sum-of-the-parts valuation of RM47 billion. Our sum-of-the-parts-based target price would jump to RM13.26 from RM10.58,” noted UOBKH, who maintained its “buy” recommendation, as well as their sum-of-the-parts target price of RM10.58.

TauRx, which specialises in developing treatments for Alzheimer’s, was reported to have invited banks to pitch for a mandate to advise the company on a potential listing after results of late-stage clinical trials, which are likely to come in later this year.

A TauRx spokesperson had noted that talks have focused primarily on identifying likely options available to the group, one of which could be an initial public offering next year, with no decision to be made until the results of the clinical trials were available.

This may become a catalyst for the local gaming group, who saw its shares rise to close at RM7.40, up 30 sen, yesterday.

Genting’s investment in TauRx comes from a US$120 million investment when the company was founded in 2002. To date, the company has managed to raise a total of US$350 million from various investors, according to StarBiz, who quotes Maybank IB that “TauRx supports the view that Genting remains deep in value”.

Maybank IB had also noted that the largest-listed company that focuses on Alzheimer’s drugs to date was Axovant Sciences, with a market capitalisation of US$1.6 billion. Older Alzheimer’s drugs by larger pharmaceuticals, as well as generic variations could generate annual sales of at least US$6 billion, according to Maybank IB.

As of the noon close, Genting’s shares were last traded at RM7.36, down 4 sen.