KUALA LUMPUR: Genting Bhd
's recovery remains on track as multiple factors in play are expected to contribute to a positive outlook, said Hong Leong Investment Bank (HLIB) Research.
In a post-results update, the research firm said the group is expected to benefit from the continued recovery in foreign visitations at both Resorts World Genting and Resorts World Singapore (RWS), driven by the increasing frequencies of global flights (particularly outbound flights from China).
This is especially so given the visa-free travel pact between China and both Malaysia and Singapore.
Additionally, HLIB said spill-over benefits are anticipated for RWS from a series of prominent music concerts scheduled in Singapore in late 2023 and 2024.
Furthermore, the performance of Resorts World Las Vegas (RWLV) is projected to be underpinned by the growth in convention visitations and major events in Las Vegas.
HLIB raised its FY24-25 projection on Genting by 3-6% as it raised its revenue assumption and project a narrower loss from its joint venture and associate.
The research firm maintained its "buy" call and raised its target price to RM7.12 from RM6.96 peviously.
"At its present valuation, we are of the opinion that Genting is undervalued as it does not sufficiently capture the potential recovery of both Genting Singapore Ltd and Genting Malaysia Bhd.
"Furthermore, it is important to point out that Genting is currently trading at an 8% discount to the assessed value of its stake in Genting Singapore," it said.
TA Securities Research, its its results update, said management expects the new mega casino resort in Las Vegas to bring a certain vibrancy to the city and benefit existing players.
"RWLV will continue to leverage on Hilton branding partnership to attract more high net worth customers," it said.
TA, which maintained its "buy" call, upgraded Genting's sum-of-parts-valuation to RM5.54 from RM5.30 previously after raising Genting Malaysia's valuation to RM3.17.
The research firm said Genting will benefit from increasing foreign buying interest in Malaysia.
Genting recorded a 4Q23 core profit after tax and minority interest (Patami) of RM414.3mil after factoring in exceptional items (mainly receivables impairment) totalling RM264.2mil. This brought FY23 Patami to RM1.58bil.
The group declared a dividend of nine sen a share, going ex on March 20, 2024, which brought FY23 total payout to 15 sen a share.
HLIB said the performance exceeded market expectations due to stronger-than-expected topline and contribution from its joint venture and associates.
