KUALA LUMPUR (Jan 30): While Genting Bhd's additional cost for redesigning Resort World Las Vegas (RWLV) may not impact immediate earnings, it could lead to higher depreciation and amortisation charges, said Hong Leong Investment Bank Research (HLIB Research).

This follows the settlement on a dispute between Genting's RWLV and Wynn Resort, involving trade dress and copyright infringement claims surrounding the design of the former's upcoming RWLV hotel and casino resort property, announced just yesterday.

In a note this morning, HLIB Research wrote: "While there could be additional cost of redesigning RWLV's casino resort, we opine that this would not impact immediate earnings as the incremental cost is likely to be capitalised (i.e. capital expenditure of constructing the property).

"Nonetheless, upon completion of the casino resort, this could lead to higher depreciation and amortisation charges associated with the additional cost from the design changes. The magnitude of the additional cost was not disclosed but is expected to be announced at a later date," said HLIB Research analyst Rachael Hong, adding that forecasts are unchanged due to the lack of cost details.

HLIB has downgraded the stock to "hold", from "buy" previously, with an unchanged target price of RM7.12. The downgrade took into account the 9% rise in Genting shares since its recent upgrade on Dec 19, 2018.

At 9.42am, shares in Genting were up five sen or 0.73% to RM6.94, valuing the group at RM26.53 billion.