KUALA LUMPUR (April 26): Maybank Investment Bank Research has maintained its “buy” rating on Genting Malaysia Bhd (GenM) at RM2.68 with a lower target price of RM2.96 (from RM2.97) and said it understood that the tender results for a downstate casino licence that will potentially allow Resorts World New York City to deploy table games and add more than 53 sen per share will likely be delayed to the first quarter of 2024 (1Q2024) from 4Q2023.

In a note on Wednesday (April 26), Maybank IB’s Samuel Yin Shao Yang said Las Vegas Sands flagged this during its 1Q2023 earnings call.

He said the request for applications process has also stalled after applicants submitted questions to the New York State Gaming Commission for clarification three months ago.

Commenting on GenM, Yin said lingering fears over the Batang Kali landslide may weigh on 1Q2023 results.

“Yet, recovery accelerated from March 2023 onwards as almost all 10,500 rooms at RWG (Resorts World Genting) are now available.

“We trim FY2023/FY2024/FY2025 estimated core earnings by 16%/3%/4% and DCF-TP  (discounted cash flow-based target price) to RM2.96 (-1 sen) but maintain our 'buy' call.

“Separately, we raise our ESG (environmental, social and governance) score for GenM to 59 (from 51) on easing GHG (greenhouse gas) intensity. That said, it needs to make headway in capturing Scope 3 emissions and has yet to adopt a net zero/carbon neutral policy,” he said.

Yin said the Batang Kali landslide of Dec 16, 2022 that claimed 31 lives caused 4Q2022 RWG visitor arrivals to fall 10% q-o-q to 5.3 million.

“We understand that rainy weather in January and February 2023 discouraged many from visiting RWG, especially during the peak Chinese New Year season, for fear of another landslide.

“Thus, 1Q2023 core net profit may not be better q-o-q (4Q2022: RM121.9 million).

“We trim FY2023 estimated RWG visitor arrival by 0.5 million to 23.7 million and cut FY2023 estimated core net profit by 16%,” he said.