KUALA LUMPUR (Nov 14): CIMB Research has maintained its Add rating on Genting Malaysia Bhd (GenM) at RM4.09 with a higher target price of RM5.90 (from RM5.70) and said that as the sole casino monopoly in the region, it was insulated from the anti-corruption crackdown in China as its customers are local mass market and Asean-based VIPs.
In a note Nov 13, the research house said a casino licence win in New York and expansion in gaming capacity in 2016 were strong re-rating catalysts, adding that GenM was its top pick in the gaming sector.
“We maintain our Add rating with an increased target price, as we add 38 sen to our RNAV to account for a New York (NY) casino win, and rollover into FY16.
“We cut FY14-16 earnings by 14-34% for poor 1H14 results, negative impact of GST and delay of the new casino tables at Genting to FY16 from FY15.
“In the unlikely event of the failure to win a single licence, our worst-case target price of RM5.48 still offers 34% upside,” it said.
At 9.39am, GenM rose 0.25% or one sen to RM4.07 with 14,500 shares done.