Genting U.S. operations strong, to be pillar for earnings: Nomura

Genting Group’s U.S. operations are seeing strong momentum after reopening and will provide a key pillar for earnings, analysts at Nomura wrote.

The firm reiterates its “buy” rating on Genting Malaysia with a share price of MYR3.50 and a “neutral” rating on Genting Bhd with a target price of MYR5.20.

At Resorts World New York City, three-month gross gambling revenue as of the end of August was $229 million, flat on the prior three months, but higher than pre-Covid levels.

The resort increased its video gaming machines to 6,444, just under a maximum capacity of 6,500. 

Resorts World Catskills, which is 49 percent owned by Genting, has GGR of $60.9 million, up 30 percent from the prior three months, but 4 percent lower than the same period of 2019. 

Data is not yet available for Gentings’ $4 billion Resorts World Las Vegas, which opened in mid-June. However, Nomura points to strong state and city-wide data as a proxy. In Las Vegas, GGR for the period was $2.03 billion, up 24 percent sequentially and 21 percent higher than pre-Covid. 

“We believe that reopening momentum in the US casinos has been strong so far, with GGRs in most cases already above pre-COVID-19 levels,” the note said. “ This is all the more encouraging as inbound tourism to the US, especially from Asia, continues to be very limited. We believe the US operations will likely remain a key pillar for GENM and GENT’s earnings, given the higher vaccination coverage in the US and a lower appetite for strict lockdowns.”

Genting Malaysia reopened its Resorts World Genting property on Sept. 30th, but at present visitation will be limited to guests within the home state. The government has said it won’t ease travel restrictions until the country reaches 90 percent vaccination rates.

Genting Singapore is open with capacity restraints, though without inbound tourism, analysts don’t see much upside for revenue growth. Resorts World Manila in the Philippines is closed to the general public.