Analysts: Genting among hardest hit by Covid-19

Analysts: Genting among hardest hit by Covid-19

Analysts reiterate call to “sell” as gambling operator continues to struggle amid the Coronavirus crisis.

Malaysia.- Genting Malaysia Bhd has been hit the hardest by the Coronavirus crisis, according to researchers.

In a note released today, Affin Hwang analyst, Ng Chi Hoong, wrote that the group’s facilities in Genting Highlands will not be operational for at least 14 days, adding that the group has also suspended operations in New York, US for two weeks.

“We are lowering our earnings per share (EPS) forecast for 2020 by 8.4% to factor in the shutdown for its Malaysia and US operations. We have also lowered our sum-of-parts-based 12-month target price to RM1.92 (€0.39) from RM2.10 (€0.43) and maintain our ‘sell’ call,” Ng said.

The analyst estimated that the loss of revenue for Genting Malaysia would amount to RM250 million (€51.8 million) for the 14 days it remains non-operational.

He added that the new outdoor theme park could see further delays to its initial plans to open in the third quarter of the year, given that construction works have been suspended until further notice.

If the Malaysian government introduces social distancing in the casino, as has happened in Macau, the impact on Genting will worsen.

“Overall gaming revenue was already on a decline since early February, as concerns over the spread of Covid-19 in close proximity had started to deter customers from visiting,” Ng added.

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