Kenanga lowers earnings forecast for GentingM amid more lockdowns

KUALA LUMPUR: Kenanga Research has lowered its earnings estimates on Genting Malaysia Bhd as it forecasts a deeper impact on operations due to further lockdowns domestically and in the UK.

"We forecast a wider net loss of RM1.80b in FY20 from RM1.36b as we increased losses from Malaysia and the UK casinos but reduced losses for North America operation and Empire Resorts.

"We also further cut FY21 earnings estimates by 22% on lower Malaysian earnings, higher North America earnings but keep the UK earnings unchanged," said the research house.

It lowered the target price to RM2.44 from RM2.60 previously, and reiterated "market perform" on the stock based on last Friday's closing price of RM2.50.

It added that parent Genting Bhd is a better proxy to earnings recovery on the back of Genting Singapore.

In the news, it was reported last week that Genting Malaysia's UK unit is proposing to permanently close its Genting Casino in Southport due to Covid-19.

The UK started its second lockdown on Nov 4, 2020, to combat the pandemic, which has worsened with daily new cases rising above 40,000 since Dec 28, 2020.

In Malaysia, the reintroduction of the movement control order will further impact its operations.

"The seasonally strong year-end and CNY bump are not expected in 4QFY20 and 1QFY21 and it could return to the red again but the severity is less than 2QFY20 as the latter had a full lockdown.

"While there are no updates from the outdoor theme park, known as Genting SkyWorlds, targeted timeline to open in mid-2021

could be delayed given the current situation," said Kenanga.

However, the research house noted some positive signs in the North America operations, which could help to reduce losses.

Resorts World Casino New York City and Resorts World Catskills have reported encouraging data while Resorts World Bimini has reopened on Dec 25, 2020.
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?


73% readers found this article insightful

Next In Business News

Sea launches investment arm, expects e-commerce sales to double in 2021
Thai Airways plans slimmer fleet and workforce in turnaround plan
UWC doubles Q2 net profit�
Bioalpha posts RM37.8mil loss in FY20
Grand-Flo buys property assets near Genting Highlands�
Straits associate firm Banle Energy to file for HK IPO
Techfast ventures into petroleum trading, oil bunkering biz
eCurve shopping mall to undergo redevelopment
KLCI stays range-bound, market breadth negative
Bank Negara seen holding key rate as infections slow, Covid-19 vaccination starts

Stories You'll Enjoy