Genting Malaysia 'buy' call maintained at RHB

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KUALA LUMPUR (May 8): RHB Research has maintained a “buy” call on Genting Malaysia, saying the company's upcoming better-than-expected results should dispel uncertainty on the impact of the tax hike, and boost sentiment for the stock. 

“Both gaming volume and visitors have surged in the first quarter following our recent ground checks. They are expected to drive topline growth and cushion its margin, on top of cost-saving initiatives,” it said in a note.

The research house said recent improvements in Malaysia-China ties will be another catalyst to Genting Malaysia.

The potential relaxation of visa requirements should lead to a huge influx of Chinese tourists (known to be among the biggest spenders), and boost visitor arrivals to Resorts World Genting (RWG), it noted. 

“The tourism dollar is a key focus of the government, and ties in well with Visit Malaysia 2020. The recent reinstatement of mega projects with China state-owned contractors will also indirectly boost Chinese nationals in Malaysia.

“Malaysia welcomed three million Chinese tourists last year, of whom only 38 per cent visited RWG,” it added.

It set a target price of RM3.90 for Genting Malaysia.

At 2.50 pm, shares of Genting Malaysia rose four sen to RM3.20 with 3.62 million shares transacted.