PETALING JAYA: Genting Bhd
and Genting Malaysia Bhd (GenM) continue to face near-term headwinds from rising operating costs, softer regional gaming trends and margin pressures, although earnings momentum are expected to improve gradually on the back of Resorts World New York City’s (RWNYC) casino expansion and stronger performance at Resorts World Las Vegas (RWLV).
Genting’s earnings performance mostly came in below research houses’ and consensus expectations due to lower earnings for GenM and Genting Singapore (GenS).
GenS saw a 7.8% year-on-year (y-o-y) decline in the first quarter of 2026 (1Q26) gaming revenue, suggesting continued loss of market share to its peer Marina Bay Sands, while non-gaming revenue grew by only 8.3% y-o-y, insufficient to mitigate the decline in gaming revenue.
For 1Q26, RWLV showed strong performance due to increased convention attendance as well as improvement in high-end play, with increased table volumes and hold percentage within management’s range.
On a quarter-on-quarter (q-o-q) basis, Genting’s 1Q26 results were impacted by lower fresh fruit bunch production in the plantation segment and softer property activities.
The group’s core net profit rebounded from a RM96mil loss in 4Q25 to a profit of RM116mil in 1Q26, attributable to better margins, lower depreciation charges, absence of other losses recognised in previous quarter, and positive tax effect.
Phillip Capital Research said while the sequential improvement for Genting is encouraging, earnings remain below 1Q25 levels, with sustained recovery at Resorts World Sentosa and the ramp-up of RWNYC’s commercial casino operations key to driving a stronger earnings recovery through 2026. Rising operating expenses and softer win rates remain key risks.
“We trim our 2026 to 2028 earnings estimates by 9% to factor in softer higher operating expenses and higher effective tax rates,” the research house said.
Following earnings revision and rolling forward of valuation horizon, Phillip Capital Research maintained a “buy” rating on Genting with a lower sum-of-parts derived target price at RM3.55 (from RM3.95 previously).
For GenM, Phillip Capital Research said moving forward, management expects the Middle East headwinds to persist in the near term, which is likely to continue weighing on UK premium gaming performance and delay margin recovery.
