Genting Malaysia earnings will see limited impact from oversupply in the region, as earnings have traditionally been driven by mass players, said Morgan Stanley in a note last week.
“Based on our forecast, mass/ premium mass players will continue to contribute 55 percent of the revenue. Currently, 70 percent of Genting Malaysia visitors are day- trippers and this could increase with the new cable car system,” said the brokerage.
“We forecast 15 percent EBITDA CAGR for Genting Malaysia in 2015-18e, on the opening of GITP facilities starting 3Q16,” it added.
The lead up of the opening of GITP facilities, which involves a major revamp of Genting’s facilities as part of its tourism plan may also boost up the company’s stock price, said the brokerage. “As GENM is less reliant on VIP, its shares could see a rally similar to other openings as attractions are progressively opened from 3Q16.”