Maybank downgrades Genting EPS forecasts

The bank has adjusted its EPS forecasts for the next three years.

Malaysia.- Analysts at Maybank Investment Bank have adjusted their outlook for Genting Group. They have reduced their forecast for earnings per share by 24 per cent for 2023 and by 8 per cent and 5 per for 2024 and 2025, respectively.

Despite the adjustments, Maybank remains optimistic about Genting’s post-Covid-19 recovery prospects. Analyst Yin Shao Yang said the bank still expects Genting’s earnings to rebound to levels similar to those of 2019 by the end of FY25. As a result, the bank maintains its “Buy” rating on Genting’s shares. One positive factor contributing to this assessment is the gradual recovery of the Malaysian gaming sector.

Maybank cites several critical factors influencing Genting’s performance. Firstly, the shift towards the mass market mix is expected to boost margins due to reduced commissions and rebates. Additionally, Genting Malaysia’s expansion of Resorts World Genting through the Genting Integrated Tourism Plan (GITP) is projected to attract more high-margin mass market gamblers, leading to higher visitor arrivals.

However, the report also points out challenges, particularly concerning bad debt. Notably, most of Genting Singapore and Genting UK VIPs are Chinese nationals, but gambling debts are unenforceable in China, posing potential risks for the company’s financials.