PETALING JAYA: Genting Malaysia Bhd
(GenM) is set for a major earnings boost, its net profit to soar to RM1.93bil by 2030, driven by the expansion of its Resorts World New York City (RWNYC) property, says Maybank Investment Bank Research (Maybank IB).
In its latest report, Maybank IB maintained a “buy” call on GenM but trimmed its target price slightly to RM2.91 a share from RM2.97, citing minor forecast adjustments.
The research house said RWNYC’s planned upgrade to a full-fledged commercial casino is “virtually assured” of success, as New York prepares to award up to three downstate casino licences by year-end.
“Given that there are only three remaining bidders for up to three available licences, we believe all three – including GenM’s RWNYC – are virtually assured of approval,” said Maybank IB. “RWNYC’s bid is also understood to be the strongest.”
If the licence is secured, RWNYC’s expansion, allowing it to operate gaming tables in addition to its current video lottery terminals, could transform its earnings profile,” it explained.
Maybank IB now estimates the project will generate US$455mil (RM1.93bil) in net profit at its peak in 2030, significantly higher than the previous forecast of US$145mil annually.
This expansion is expected to add 47 sen per share to GenM’s sum-of-the-parts valuation, potentially raising the stock’s fair value to RM3.21 a share under a “blue sky” scenario.
The New York downstate casino market is projected to become the second-largest gaming market in the United States after Las Vegas.
Industry forecaster Spectrum Gaming estimates the region’s gross gaming revenue (GGR) could hit US$6.5bil by 2031, with RWNYC commanding a 42% market share and generating about US$2.7bil in GGR.
New York’s decision to issue these casino licences stems from a strategy to raise public revenue, spur private investment and strengthen its entertainment economy post-pandemic.
Each licence carries an upfront fee of at least US$500mil, potentially bringing in US$1.5bil to state coffers immediately.
Beyond fiscal benefits, the new casinos are expected to generate thousands of construction and hospitality jobs, boost tourism, and recapture gaming revenue previously flowing to neighbouring states like New Jersey and Connecticut.
