Maybank has upgraded Genting Berhad to a ‘Buy’ rating, citing recent share purchases by the Lim family and Genting’s CEO at valuations near all-time lows. This move signals confidence in the company’s prospects despite recent setbacks.
Analyst Samuel Yin Shao Yang also points out that the company’s share discount to its SOTP (sum-of-the-parts) valuation is at a record 66 percent, excluding the COVID-19 period. Maybank analysts noted that this current valuation effectively ‘offers Genting Singapore shares for free’ within their assessment.
In the investment memo released Wednesday, Samuel Yin Shao Yang highlighted that Genting’s share price had fallen sharply following its disappointing fourth-quarter 2024 results, primarily due to the weak performance of Resorts World Las Vegas (RWLV).
For full year 2024, Genting Berhad’s revenue increased by 2 percent to MYR27.72 billion ($6.26 billion), up from MYR27.12 billion ($6.12 billion) in 2023. Despite the revenue growth, net income decreased by 5 percent to MYR882.95 million ($119.2 million), down from MYR929.20 million ($209.6 million) in the previous year.
The company attributed RWLV’s struggles to unusually warm weather in Las Vegas, while some gamblers reportedly avoided the venue due to an ongoing investigation by the Nevada Gaming Control Board (NGCB) into the alleged acceptance of illegal bookies. As a result, Genting’s share price declined to levels similar to those seen during the COVID-19 pandemic, nearing a 10-year low.
In response, key stakeholders have shown confidence in the company’s value. The Lim family (Kien Huat Realty and Lim Keong Hui) purchased 7.3 million shares valued at MYR22.8 million ($5.1 million), while CEO Tan Kong Han acquired 100,000 shares for MYR300,000 ($67,680).
In the Wednesday investment memo, Yin Shao Yang notes that Genting’s valuation metrics are currently at or near historical lows. The company’s price-to-book value (P/BV) stands at 0.4 times, marking an all-time low.
Despite near-term risks, Maybank identified several factors that could drive a positive re-rating of Genting’s stock: the approval of TauRx’s Alzheimer’s drug and the outcome of the RWLV investigation.
TauRx, which is 20 percent owned by Genting, is awaiting a decision from the UK Medicines and Healthcare products Regulatory Agency (MHRA) regarding its Alzheimer’s drug. A positive outcome could significantly enhance Genting’s value, potentially lifting its stock to MYR5.09 ($1.12) per share.
Regarding the RWLV investigation, a favorable resolution to the NGCB investigation would likely improve RWLV’s operational performance.
Maybank also flagged the key risk posed by a Bahamian lawsuit, noting that a significant downside risk remains due to Genting Malaysia’s $600 million lawsuit with its Bahamian partner. The outcome of this case, expected by June 2025, could impact Genting’s financial stability.
