Malaysian casino equipment supplier and distributor RGB International Bhd is on track to report its strongest quarterly earnings since its founding, driven by strategic expansions in the Philippines and Cambodia.
This is according to an investment memo from Singaporean financial services firm Philip Capital, as reported by The Edge Malaysia.
The company is expected to report core earnings of RM51 million ($11.4 million) for 4Q24, pushing its total earnings for the year to RM108 million — a remarkable 91 percent year-on-year increase. The growth is attributed to the delivery of 1,968 electronic gaming machines (EGMs) to the Philippine Amusement and Gaming Corporation (PAGCOR), valued at $81 million.
This order, completed in the fourth quarter, was a major contributor to RGB’s strong profits.
Philip Capital has projected a compound annual growth rate (CAGR) of 32 percent in profits from 2023 to 2026 for the company.
In addition to strong earnings growth, RGB’s improving profit margins, solid balance sheet, and an expected 10 percent dividend yield for 2024 make it a compelling investment opportunity.
RGB’s dominant position in the Philippines, where it is expected to capture 60 percent to 70 percent of new EGM orders, will drive its continued growth. Furthermore, global market expansions in the UAE and Japan, where gambling has recently been legalized, are expected to increase the total addressable market for EGMs by 17,000 units over the next few years.
The company’s projected sales of 4,500 to 5,500 units from 2024 to 2026 reflect strong demand in these growing markets.
In Thailand, RGB is positioning itself to benefit from the government’s approval of new casinos, with plans to establish a subsidiary in the country. In Cambodia, RGB has secured an exclusive agreement with FIRM 614, the only licensed EGM importer. The country’s new regulations, requiring casinos to upgrade outdated gaming equipment by the end of 2024, present a promising growth opportunity for RGB.
With exclusive distribution rights in the Philippines and participation in the country’s expanding integrated resorts, RGB is well-positioned to capitalize on the expected growth in the Philippines’ gross gaming revenue (GGR), which is projected to surpass $6 billion.
Looking further ahead, Philip Capital noted that the privatization of PAGCOR’s casino operations, scheduled to begin in 2026, could result in a higher valuation for RGB’s interests in the Philippine market, ranging from $1 billion to $1.4 billion.
