"Valuation remains undemanding, and the stock should be re-rated come the upcoming results announcement, on top of several potential upside risks," it said in a note.
It maintained its buy call on the stock with a target price of RM3.90.
According to the research house, the consensus FY19F EBItda of RM2.42bil is over-pessimistic.
"The contraction in EBITDA margin for Resorts World Genting (RWG) is likely to be less than the Street’s 8-10% estimate.
"Recall that the casino tax was raised by 10ppts during Budget 2019, along with the outdoor theme park legal dispute and impairment on Mashpee’s note.
"The Street, since then, has stripped off ~MYR900m in FY19 EBITDA," it said.
RHB added that both gaming volume and visitors have surged in 1Q and are expected to drive topline growth and cushion its margin, in addition to cost-saving initiatives.
"Hence, we may not see a contraction for RWG 1Q19’s EBITDA in absolute terms, contrary to the Street’s expectation," it said.
It added that Skytropolis has been progressively unveiled since Dec 2018 and FY19 visitor growth is expected to top FY18's 10% year-on-year, while the favourable RM/USD rate and higher net win for Resorts World New York are the other positives.
Meanwhile, the improvement in Malaysia-China ties could lead to a huge influx of Chinese tourists and boost visitor arrivals to RWG, said RHB.
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