Genting should enjoy improved sequential earnings in 2H, says Maybank IB

Saturday 04 May 2024

KUALA LUMPUR (Aug 28): Genting Bhd should enjoy improved sequential earnings in the second half of 2023, as visitation to its casinos in Singapore and Las Vegas improves on seasonality and major events, according to Maybank Investment Bank (Maybank IB).

In a note, Maybank IB said Genting’s earnings should improve after core net profit for the first six months ended June 30, 2023 (1HFY2023) came in slightly below expectations, despite climbing 58% quarter-on-quarter for the second quarter ended June 30, 2023 (2QFY2023) to RM160.5 million, up from RM98.0 million for 1QFY2023.

The research house said while the June quarter benefited from improved visitation at both Resorts World Genting in Malaysia and Resorts World Sentosa (RWS) in Singapore, earnings should grow significantly during 2HFY2023 on “seasonally higher visitor arrivals at all its integrated resorts".

“As a leisure destination, RWS traditionally welcomes more visitors in July and August, due to summer holidays in the northern hemisphere,” said Maybank IB.

“After a slow start in 1HFY2023, [RWS] also noted that Chinese visitors are starting to return en masse.

“Resorts World Las Vegas also ought to welcome more visitors in 4QFY2023, in conjunction with the inaugural Formula One race in Las Vegas,” it said.

Maybank IB has trimmed by 3% its earnings per share estimates for Genting for FY2023, but has maintained its estimates for FY2024 and FY2025.

Current revenue projections have revenues rising 16.3% to RM26.0 billion for FY2023, and another 10.7% to RM28.8 billion for FY2024.

At the time of writing on Monday (Aug 28), Genting had dipped 0.68% or three sen to RM4.37, with 1.41 million shares done, giving it a market capitalisation of RM16.94 billion.

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