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.
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