Phillip Capital Research said GenM’s leisure and gaming business in the United States accounted for about 18% to 20% of the group’s revenue and Ebitda in 2023.
PETALING JAYA: Genting Malaysia Bhd
’s (GenM) US operations are expected to deliver stronger earnings in the second quarter of 2024 (2Q24), supporting the resilience of the leisure and gaming conglomerate.
According to Phillip Capital Research, GenM’s leisure and gaming business in the United States accounted for about 18% to 20% of the group’s revenue and earnings before interest, tax, depreciation and amortisation (Ebitda) in 2023.
In its report, the brokerage highlighted that GenM’s New York video gaming machine (VGM) facilities, including Resorts World New York City and Resorts World Hudson Valley, reported a combined net win growth of 5.5% year-on-year (y-o-y) in 2Q24, outpacing New York state’s overall growth of 4.3%.
Resorts World Hudson Valley, owned by 49% associate Genting Empire Resorts, delivered the highest net wins growth at 19.4% y-o-y on a low-base effect, as it only began operations in December 2022, Phillip Capital Research noted, adding that as a result, VGM’s market share expanded a 0.6 percentage point y-o-y.
However, Resorts World Catskills (owned by Empire Resorts) saw 2Q24 gross gaming revenue (GGR) declining by about 8% y-o-y, affected by reductions in slot and table game GGR.
“With Resorts World Catskill’s GGR remaining flat quarter-on-quarter, we expect Empire Resorts’ 2Q24 Ebitda to be relatively similar to 1Q24 at US$3mil,” Phillip Capital Research said.
“Overall, we expect an improved performance from the US operations which made up 18% to 20% of GenM’s group revenue and Ebitda in 2023,” it added.
Phillip Capital Research maintained its “buy” call on GenM, with an unchanged target price of RM3.45. “GenM remains our sector top pick, given the superior 6.8% dividend yield. We continue to advocate investors to accumulate on share price weakness, as GenM trades at an undemanding 6.6 times estimated 2025 enterprise value-to-Ebitda,” it explained.
Meanwhile, Phillip Capital Research noted the New York State Gaming Facility Location Board recently updated the timeline for the request for applications for three casino licences, whereby the application deadline was set for June 27, 2025.
This would be followed by the Community Advisory Committees vote by Sept 30, 2025, and a decision would be expected by Dec 1, 2025, with the licence expected to be awarded by Dec 31, 2025.
“We view this as a positive development and believe it will serve as a rerating catalyst with a more definite timeline,” Phillip Capital Research said. It had earlier projected an additional RM250mil-RM320mil Ebitda contribution in 2026, assuming 200-250 tables being set up for the first year of operations.
