RWG reopening could drive Genting Malaysia recovery in 4Q

KUALA LUMPUR: Genting Malaysia Bhd could finally break even in the final quarter of the year following six consecutive quarters of core net losses.

Resorts World Genting reopened on Sept 30, 2021, a month earlier than expected, which Maybank Investment Bank Research said could drive a recovery in Genting Malaysia's earnings.

For the time being, only Pahang residents are allowed to visit Resorts World Genting but residents from other states are expected to visit when 90% of Malaysian adults are fully vaccinated.

At present, about 85% of the Malaysian adult population are fully vaccinated.

"We conservatively expect RWG to welcome 3.0m visitors in 4Q21 or only half of that welcomed pre-COVID-19 in 4Q19 at 6.2m.

"Recall that when RWG first reopened post-COVID-19 in 3Q20, it welcomed 4.0m visitors," said Maybank IB.

Looking further ahead, the opening of the much-delayed Genting SkyWorld theme park at Resorts World Genting could be the next catalyst for Genting Malaysia.

Maybank IB maintained its view that the theme park will open in December 2021 to coincide with the school holidays, and will attract both gaming and non-gaming visitors.

This is expected to boost the recovery in Resorts World Genting visitor arrivals to pre-Covid-19 levels in FY22.

"Our FY22E/FY23E core net profits are based on FY22E/FY23E RWG visitor arrivals of 24.2m/26.2m. In short, we expect some sort of normalcy resembling pre-COVID-19 levels to return in FY22E," it said.

Meanwhile, with Resorts World Genting having been shut for almost the entire third quarter of 2021, Genting Malaysia is expected to generate a quarterly core net loss similar to that of 2Q21, which stood at RM353.4mil.

Maybank IB maintained its "buy" call on the stock with an unchanged discounted cash flow-based target price of RM3.40.
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