Genting Malaysia price rebound unlikely to continue in 4Q


KUALA LUMPUR: Kenanga Research expects the recent strong price rebound to have priced in the earnings recovery and is unlikely to continue in the final quarter of the year.

The research house, which downgraded the stock to "market perform", said 9MFY20 was disappointing as the core loss of RM1.28bil in the period was higher than its and consensus full-year estimate of RM740.6mil and RM824.3mil.

However, 3Q was a good quarter with solid numbers from Resorts World Genting, which only posted a 21% decline in adjusted Ebitda thanks largely to the mid-to-premium segment where business volume was realtively at the same levels as in the previous year.

"In our opinion, 4QFY20 is unlikely to be a strong quarter despite being a year-end season given the new CMCO in Malaysia currently and the re-imposition of lock down in UK as well as resurgence of Covid cases in the North America," it said.

Kenanga believes 2021 will be a recovery year before a full recovery in 2022.

"Post-3QFY20, we widened our FY20 net loss to RM1.36b from RM740.6m after adjusting for a stronger RWG earnings but imputing more losses for the UK and North America operations.

"We also cut FY21 estimates by 9% for the same basis as FY20," it said.

It revised lower the target price to RM2.60 from RM2.75 previously post earnings revision based on an unchanged 10% discount to its sum-of-parts valuation.
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

89% readers found this article insightful

Next In Business News

Morgan Stanley CEO's annual pay rises by over 20%
‘Unstoppable’ luxury stocks remind some investors of US tech
Ambani’s Reliance doubles down on 5G pledge after record profit
PUNB offers payment deferment, rental discount
CPO futures may undergo technical correction next week
Blackstone-backed Patria eyes expansion in Latam, Asia
METALS: Tin, aluminium, copper prices down
Oil price falls on China's COVID-19 cases, high crude build
IBM, Intel slump weighs on Wall St as coronavirus concerns rise
GLOBAL MARKETS-Weak data, earnings drag stocks lower

Stories You'll Enjoy