RHB Investment Bank says it expects Genting and Genting Malaysia to return to profitability in 2022, despite the potential downside risk from Omicron on earnings recovery.
“Many countries are now better equipped and nimble in handling the pandemic. Coupled with the massive cost rationalisation efforts undertaken previously by the casino operators, these should partially cushion the impact. Both the casino operators will resume recovering after the Covid-19 situation stabilises,” said the brokerage, in a report picked up by The Edge Markets.
Similar to a note by Hong Leong Investment Bank (HLIB) Research last week, the investment bank has maintained its “overweight” rating of the Malaysian gaming sector, with Genting as its top pick.
RHB said this is “due to its attractive 6.2x EV/EBITDA vs the regional peer average of c.13x, which provides investors a cheaper alternative to position for the tourism recovery play angle”.
RHB said further upside could come from a stronger-than-expected contribution from Genting’s Las Vegas resort, which is in the early stages of ramping up business.