Genting Malaysia

[winston]

not vested

Complaint distraction from earnings recovery

GENM wholly-owned subsidiary GAI was named in a complaint with regards to operations of RW Bimini; damages could hit an equivalent of RM0.46/sh.

This complaint could affect GENM’s bid for a casino licence in New York.

We have not included any potential upside from a successful bid in our valuation.

At 12.7x CY25F P/E and 4.5x CY25F EV/EBITDA, we think its valuations are undemanding given its strong FCF generation and attractive dividend yields.

TP: RM 3.65

Source: CGS

https://rfs.cgsi.com/api/download?file= ... 97E235D71F

[winston]

not vested

Maintain BUY call and MYR3.09 DCF-TP

GENM’s 2023 Sustainability Report is a lot more detailed than before.

Yet, we note a few points for improvement:-
(i) Scope 3 emissions ought to be reported;
(ii) more waste could be diverted from disposal;
(iii) proportion of independent non-executive directors ought to return to ≥50%;
(iv) more women directors could be appointed to its BOD; and
(v) equity injections into Empire Resorts ought to be reduced, if not ceased.

We reduce our ESG 2.0 score for GENM to 48/100 from 59/100.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/411005.pdf

[winston]

Awakening Moments

After a decade of share price downcycle, GENM is well-positioned to stage a meaningful rebound on its 60th anniversary.

Key re-rating catalysts include multiple value unlocking event catalysts in the US which will be finalised in 2025-26, besides RGW’s above-COVID-19 GGR level in 4Q24.

More importantly, capital downside is increasingly limited with depressed valuations of -2SD below the mean and lush dividend yields of 79%.

Maintain BUY and target price of RM2.83.

Plenty of event catalysts to watch out from US portfolio.

Over the years, GENM’s US portfolio has grown meaningfully and contributes 17-20% of the group’s EBITDA. Plenty of event catalysts may materialise in the near term, including:
a) Resorts World New York City’s (RWNYC) tender for a lucrative downstate casino license;
b) potential revival of Mashpee tribe’s First Light Casino in Massachusetts which will allow writeback of RM1.8b worth of promissory notes;
c) Miami land sales which can potentially fetch up to US$1.5b in proceeds; and
d) resolution of RAV Bahamas’ (RAV) lawsuit.

Source: UOBKH

https://39646150.fs1.hubspotusercontent ... (GENM%20MK)%20250114.pdf?utm_medium=email&_hsenc=p2ANqtz-_VfHV-rN7lsV86CIctnNuBsFa4-4ONwt3WEv_eK2qPKbjW-eJKOmUt-uf6mXscLmjlqqjDGrwqRNpLAYY0Jg43KGbdeg&_hsmi=342345612&utm_content=342345612&utm_source=hs_email

[winston]

not vested

Tourism rebound to lift Genting Malaysia

The number of visitors from China going to RWG was almost back to pre-Covid-19 levels in the fourth quarter of 2024 (4Q24), with more high-yielding tourists than lower-yielding tour groups.

RWG’s reopened casino floor area should also prove timely to cater for the increase in gaming volume and visitors leading up to the Chinese New Year period.

Singapore visitors were back to pre-Covid-19 levels, increasing 15% year-on-year at 910,000 guests in the first nine months of 2024 while Chinese visitors in 3Q24 reached 114,000 compared with 97,000 for 2Q24 and 44,000 in 3Q23.

Genting Malaysia should be able to maintain a dividend payout of 15 sen per share for 2024, which is equivalent to an interim dividend yield of 4% and 2024 dividend yield of 6.8%.

Key risk for Genting Malaysia’s share price stems from the suit by RAV Bahamas Ltd against Genting Americas Inc, which could affect Genting Malaysia’s bid for a casino licence in New York.

Source: The Star

https://www.thestar.com.my/business/bus ... g-malaysia

[winston]

CGS: Genting Malaysia closely monitoring developments in Thailand's gaming market

By Sharen Kaur

Exploring opportunities for integrated resort developments in emerging markets such as Thailand and the United Arab Emirates (UAE).

The group's casino portfolio in the US includes the US$5 billion Resorts World Las Vegas, along with Resorts World New York City, Resorts World Catskills, and Resorts World Hudson Valley in New York.

In the UK, Genting operates casinos in London and more than 30 provincial locations nationwide.

The company has committed up to US$100 million to Empire Resorts through its subsidiary, Genting ER II LLC (GERL), as outlined in a Bursa Malaysia filing.

Source: NST

https://www.nst.com.my/business/corpora ... -thailands

[winston]

+ve on new Genting Casino but not enough to move the needle

Impact of new mass gaming floor minor

We are positive that GENM has opened another mass gaming floor. Yet, it is nowhere near the size of the Circus Palace and Hollywood mass gaming floors which remain closed for renovations.

Thus, we refrain from raising our earnings estimates and DCF-TP.

Nonetheless, we continue to believe that GENM’s valuations are attractive.

Key risks are more related party transactions involving Empire Resorts and negative outcome from its USD600m lawsuit by RAV Bahamas (Not Listed).

Source: Maybank

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://mkefactsettd.maybank-ke.com/PDFS/428252.pdf

[winston]

vested

Casino poised for earnings recovery

PETALING JAYA: The earnings recovery trajectory remains intact for casino operators, underpinned by the rebound of travel demand and the visa-free travel pact between China and both Malaysia and Singapore, according to Hong Leong Investment Bank (HLIB) Research.

This recovery would be further fuelled by Malaysia’s official assumption of the Asean chairmanship in 2025, it noted.

“During this period, Malaysia will host key Asean meetings with delegations from prominent nations, including the United States, China, South Korea, Japan, Europe, India, Australia and New Zealand. This momentum will continue into Visit Malaysia Year 2026,” it added.

The research house said a notable development to monitor in 2025 could be the bidding for the full casino licence in downtown New York City by Resorts World New York City (RWNYC).

Currently, RWNYC is a casino operating with slot-like video lottery terminals and electronic table games.

For RWNYC to operate with Las Vegas-style slot machines, table games and sports betting, the casino must win one of the three full-scale downstate casino concessions.

“A successful bid would result in a major expansion and renovation of the casino, with an investment of US$5bil.

“The request for applications process is expected to open in mid-2025, with licences awarded by the New York Gaming Facility Board in late 2025.

“However, the ongoing complaint by the Nevada Gaming Control Board against its parent company, Genting Bhd, and the lawsuit by RAV Bahamas against Genting Malaysia Bhd’s US unit could pose challenges to RWNYC’s chances of securing a full casino license,” it noted.

Another key event to monitor this year would be the participation of Genting Malaysia in the bidding for the Thailand Entertainment Complex.

On Jan 13 this year, Thailand’s Cabinet approved a draft law, the “Entertainment Complex Business Act”, which seeks to legalise gambling and casinos. According to news reports, Thailand could launch its first casino as early as 2029.


Source: The Star

https://www.thestar.com.my/business/bus ... s-recovery

[winston]

vested

4Q Results:-

Revenue: 0%; RM 2.7b
EPS: Loss RM 458m
Net Asset RM 2.10

Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) was lower by 79% to RM180.6 million, primarily due to net unrealised foreign exchange translation losses mainly on the Group’s USD denominated borrowings.

The Group registered a loss before taxation (LBT) of RM368.2 million and net loss of RM485.6 million in 4Q24. Excluding the effect of the unrealised foreign exchange translation, the Group would have reported LBT of RM11.3 million and net loss of RM128.7 million.

https://www.bursamalaysia.com/market_in ... id=3528971

https://www.bursamalaysia.com/market_in ... id=3528971

[winston]

vested

Hard decisions to be made

Downgrade to HOLD and SOTP-TP to MYR2.41 (-12%)

Results underperformed on weak margins.

Thus, we cut FY25E/FY26E earnings estimates by 25%/26%.

Rolling forward our valuation base year to end-FY25E, we cut our SOTP-based TP to MYR2.41 from MYR2.73.

With <10% upside, we cut GENM to HOLD from BUY.

We understand that dividends were cut to prepare to expand but fear that investors will not take it kindly.

That said, we are sanguine that there will be no more equity injections into Empire and more mass gaming areas at RWG will reopen.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/440706.pdf

[winston]

vested

4Q24: Surprising Cut Of Dividends Reducing Capital Upside; Downgrade To HOLD

GENM delivered a EBITDA decline on higher opex across all operating regions, despite RWG seeing an operational improvement in 4Q24’s performance as anticipated.

Notably, a surprising dividend cut and guidance on a potentially sizeable capex cycle may continue to exert pressure on investors’ near-term sentiment.

We reduced our 2025-26 earnings assumptions, and lower our valuations yardstick to -1SD below the mean.

Downgrade to HOLD with a lower target price of RM2.28.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email