KUALA LUMPUR: Kenanga Research said gaming companies, especially number forecast operators (NFO) have managed to outperform the overall markets over the past three months due to the tax holiday following the zero-rating of the Goods and Services Tax.
"This was attributable to the 3-month tax-holiday of zero-rated GST in June to August as it
offers short-term earnings upticks given that previously the gaming companies absorbed the 6% GST," it said in its research report.
Hwever, the research house added that it is unclear of the sector will be charged with the reintroduced sales and services tax in September, which was not incurred prior to the GST implementation.
Kenanga also noted the new government's plan to review the IBR tax penalty to companies, which provided relief to Magnum, which was slammed with a RM476mil tax penalty.
Both Berjaya Sports Toto and Magnum have registered stable ticket sales for more than a year leading the research house to believe that the ticket sales downtrend should have bottomed out.
Kenanga said it preferred the casino sub-segment due to the Genting Integrated Tourism Program expansion story with Genting Bhd
being its preferred sector pick.
"We continue to believe that 2018 is an exciting year for the casino operators as the
GITP expansion story is timely to bear fruits for Genting Malaysia Bhd (GENM, OP: TP: RM5.75), thus indirectly benefiting parent GENTING as well," it said.
"In fact, the non-gaming segment has witnessed improving results in the past few quarters following the opening of SkyAvenue mall early last year and Genting Plantation Bhd’s (GENP, OP; TP: RM10.75) Genting Highland Premium Outlet last June.
"In addition, there is the opening of the brand new 20th Century Fox Theme Park by the end of the year."
It added that the impending legalisation of casinos in Japan should boost sentiment for both Genting Singapore and Genting.
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