Resorts World Genting reopening delayed by Covid surge, says Maybank IB

KUALA LUMPUR: Maybank Investment Bank Research is forecasting a wider core net loss for Genting Malaysia Bhd as it projects a delay in the reopening of Resorts World Genting to November 2021 following the recent surge in new Covid-19 cases in the country.

The research house, which had initially predicted a resumption of operations at end-August, said its new timeline for a reopening coincides with expectations that the country will achieve herd immunity in October.

However, it maintained its view that Genting Skyworld will open in December to coincide with the school holidays.

"We cut FY21E RWG visitor arrivals to 5.0m from 8.5m and widen FY21E core net loss by 52%," it said while trimming Genting Malaysia's target price to RM3.32 from RM3.38.

At the new target price, Maybank IB kept its "buy" call on the stock, which last traded at RM2.83 apiece on Monday.

Moving forward, the research house reiterated its Genting Malaysia profit forecasts for FY22 and FY23 based on expected Resorts World Genting visitor arrivals of 24.2 mllion and 26.2 million respectively.

It noted that in the US, where half its population has been fully vaccinated, Las Vegas strip gross gaming revenue hit pre-Covid-19 levels way earlier in April 2021.

"May 2021 Las Vegas Strip GGR even exceeded the May 2019 figure by 27%. Therefore, we are of the opinion that our FY22E/FY23E assumptions and estimates are not without basis," it said.

Covid-19 vaccinations in Malaysia have surged to over 400,000 a day as the country takes delivery of over 15 million vaccine doses, putting it on track for herd immunity in October, according to the government.