The bank has cut its forecast due to a rise in service tax in Malaysia.
Malaysia.- Analysts at Maybank Investment Bank have adjusted their earnings forecasts for Genting Malaysia due to a 2 per cent rise in service tax in the country. They have made a 4 per cent reduction in the 2024 core net profit forecast and a 5 per cent decrease for 2025.
Maybank’s revision the estimated core net profit at MYR913m (US$191.7m) for the upcoming year and MYR1.01bn for 2025. Analyst Samuel Yin Shao Yang said the service tax increase essentially translates into a gaming tax hike specifically for Resorts World Genting.
The Malaysian government has announced a raise in the service tax rate from 6 to 8 per cent from March 1, 2024. Shao Yang said Genting Malaysia’ has potential remedies. It could consider measures such as reducing junket commission rates or direct VIP rebate rates, raising hotel room rates, delaying salary increments, and adopting more efficient water and energy consumption practices to mitigate the impact.
The analyst also highlighted the significance of other potential catalysts for Genting Malaysia investors, such as its bid for a full casino licence in New York City and the stalled Mashpee Wampanoag tribal gaming project in Massachusetts.