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Genting’s recovery faster due to Resorts World opening, says HLIB

KUALA LUMPUR: Genting Malaysia Bhd’s (GenM) recovery will be faster than anticipated as this will be backed by the reopening of Resorts World Genting (RWG), said Hong Leong Investment Bank Bhd (HLIB).

HLIB said the re-opening was a positive surprise but RWG’s visitorships were still expected to be at least 90 per cent lower than the Conditional Movement Control Order (CMCO) period as cross-state travel was still banned.

“However, based on the lower trend of Covid-19 cases in Malaysia, we believe that RWG’s recovery would be faster than previously anticipated,” HLIB said in a note.

RWG resumed its operations on February 16 this year with stricter stand operating procedures (SOP).

HLIB has upgraded GenM’s financial year 2021 (FY21) earnings by 12 per cent to factor in the faster-than-expected reopening of RWG while leaving its financial year 2022 (FY22) earnings unchanged.

“We believe that the group’s business should normalise to CMCO levels in less than one month,” it said.

The firm maintains its “Hold” call on GenM with a higher target price (TP) of RM2.67 from RM2.27 on the back of more transparent timeline on the roll out of vaccines in Malaysia, quicker reopening of the economy and lower daily Covid-19 cases over the last week.

“However, we choose to remain conservative on GenM as there are still ample downside risks pertaining to the proliferation of Covid-19 cases in the future as GenM’s share price has already increased by circa 40 per cent since its trough in November 2020,” it added.

Source: NST