KUALA LUMPUR (May 27): CIMB IB Research has maintained its “Add” rating on Genting Bhd at RM6.33 with a lower target price of RM8.40 (from RM9.10) and said Genting’s 1Q19 core net profit was in line with house expectations at 30.4% of fullyear forecast, but above consensus at 41% of consensus FY19F.

In a note May 24, the research houe said both domestic and Singapore gaming operations experienced lower revenue in 1QFY19, which could be a major concern if the trend continues.

CIMB Research said what was a concern in 1QFY19 was Genting Singapore’s (GENS, Add) weak gaming revenue.

It said 1QFY19 Singapore gaming revenue was down 15.2% year-on-year (y-o-y), and a similar trend was seen in Malaysia.

“Domestic VIP gaming revenue was down more than 10% y-o-y while non-VIP revenue fell 6% yoy due to lower incentives given by Genting Malaysia Bhd (Hold) as the group underwent a cost rationalisation exercise.

“If this trend continues over the next few quarters, it could be a major concern for Genting. However, gaming profit was strong mainly due to strong domestic VIP earnings in 1Q19.

“Maintain Add. The stock remains attractive at 2020F 7.8x P/E,” it said.