RHB Research is optimistic over Genting Malaysia Bhd’s upcoming 19Q1 results, with expectations that the results will help dispel uncertainty over the impact of the tax hike and boost investor sentiment.
“Valuation remains undemanding, and the stock should be re-rated come the upcoming results announcement, on top of several potential upside risks,” wrote the research firm, reported by The Star Malaysia.
Since the start of the year, analysts have been waiting patiently for Genting Malaysia’s Q1 results, which will give an idea as to how well the casino operator has handled the hike in gaming taxes which came into effect in January.
Industry observers said that managing costs will be the key to mitigating the blow from higher gaming taxes.
However, RHB said that the consensus estimates of FY19F EBITDA of RM2.4 billion is overly pessimistic.
RHB explained that both gaming volume and visitors surged in 19Q1, and is expected to drive top line growth, in addition to cost-saving initiatives.
In addition, improving ties between Malaysia and China could lead to a large influx of Chinese tourists, translating to visitor arrivals to Resorts World Genting, it added.