KUALA LUMPUR (Jan 8): Genting Malaysia Bhd’s Resorts World Genting (RWG) may see its earnings increase by 60% year-on-year in 2024, aided by the recovery of visitor arrivals back to pre-Covid levels.
Maybank Investment Bank (Maybank IB) said this in an outlook over the weekend, after Genting Malaysia reported a net profit of RM158.3 million for the three months to Sept 30, 2023, reversing an RM8.2 million loss from a year earlier primarily thanks to the performance of RWG.
Maybank IB said visitor arrivals will recover to 24 million this year, up from 21 million last year, as international tourists return in greater numbers.
“While Malaysian and Singaporean visitation (around 85% of total visitation pre-Covid) has recovered to pre-Covid levels, Indonesian (around 10% during pre-Covid) and Chinese visitations (around 4% during pre-Covid) have not.
“We are hopeful that air connectivity from the latter two source markets will be fully restored this year. It also helps that Malaysia recently granted 30-day visa-free entry to Chinese visitors.
“Thanks to the above and despite the service tax hike to 8% from 6% effective March 1, 2024, we expect Genting Malaysia’s FY2024 estimated earnings to recover 60% year-on-year,” it said.
Maybank IB said that such a recovery would allow Genting Malaysia to pay dividends of 15 sen per annum, a “decent” yield of at least 5.4%.
Notably, however, both earnings and share price estimates would increase significantly should the company prove successful in winning a full casino licence in New York.
“We hope results for Resorts World New York City’s bid for a down-state commercial casino licence will be made known before year end,” it said.
“Should Resorts World New York City be successful, we expect this to spur foreign interest in Genting Malaysia shares. Note that the current foreign shareholding in Genting Malaysia is at a multi-year low (of 15% as of Sept 30, 2023),” it said.