KUALA LUMPUR (Oct 4): Hong Leong Investment Bank (HLIB) Research has advised traders to deploy a range-bound trading strategy for Genting Malaysia Bhd (GenM) — buying at RM2.41 to RM2.43 a share, and selling near RM2.63 to RM2.72 levels.

In a technical tracker on Wednesday, the research house said a decisive breakout above the RM2.72 barrier may signal a new upleg, spurring greater upside towards RM2.83 to RM2.89 levels.

“Cut loss at RM2.34,” it said.

HLIB said it continues to see GenM as a tourism play, given the ongoing recovery in foreign tourist arrivals that still has room to grow.

It said that in the second quarter of 2023, Resorts World Genting displayed an encouraging showing of earnings before interest, taxes, depreciation and amortisation, matching the corresponding period in 2019, due to greater cost control measures and recovery in foreign visitations (+33% quarter-on-quarter) mainly driven by those from Singapore, Indonesia and China.

“However, it is worth highlighting that despite these promising developments, visitation numbers still fall short of pre-pandemic levels, standing at about 85% of the levels seen before the pandemic.

“Notably, Chinese visitations, a crucial demographic in the tourism sector, remain below the 2019 figures. This can be primarily attributed to flight capacity constraints stemming from China,” it said.

HLIB said considering that tourist arrivals had yet to fully rebound back to pre-pandemic levels, and the gaming sector is still in the process of recovery, another tax hike in Budget 2024 is unlikely.

“The previous gaming tax hike happened relatively recently in 2019. If the expected scenario of no rate hike in Budget 2024 indeed materialises, this should result in easing regulatory risks, which would be favourable for the gaming sector,” it said.