Genting Malaysia may list US operations, says Affin Hwang

  • Analyst Reports
  • Tuesday, 24 Sep 2019

KUALA LUMPUR: Affin Hwang Capital research believes there is a possibility of Genting Malaysia Bhd listing its US operations within the next five to ten years, despite a few "milestones" the gaming company needs to first achieve.

However, any potential listing of the US operations is unlikely to happen in the near term as the Malaysian operations is still recovering from the gaming tax hike.

"We believe that a listing is feasible in the mid to long term, as the monetisation of these assets will not only help to reduce negative perception on the company with regards to its RPT, but also reward shareholders with a special dividend payout," it said.

Investors would be looking forward to a turnaround of Resorts World Catskills as soon as possible with the total investment amount likely to to rise due to an equity injection to refinance some of the property's debt.

"We believe that monetising RWC can help reduce the negative perception of GENM, as the acquisition of the loss-making casino is from a related party.

"We are projecting RWC to EBITDA breakeven by 2024, supported by revenue CAGR of 7.3%," said Affin Hwang.

The research house also said there is a possibility that Genting Malaysia could include its Miami assets and RW Bimini in the future listing, with the assets worth US$1.5bil to US$1.9bil in 2025.

Genting Malaysia could also play a role in GENTING BHD-owned Resort World Las Vegas, most likely as the casino operator, it said.

Affin Hwang did not include the Mashpee investment given the uncertainties over the lands rights issue.

The research house maintained its hold call on Genting Malaysia and target price of RM3.40.

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