RHB maintains ‘buy’ call on Genting

Malaysian brokerage RHB Research on Wednesday announced it is maintaining its “buy” call on Genting Singapore, due to its potential Japan expansion and its upcoming reinvestment into Resorts World Sentosa, local media reports.

In 18Q3, Genting Singapore saw net income come in at $210.4 million from $168.6 million a year earlier. Revenue gained 1 percent to $639 million, though gaming revenue was down 1 percent to $445 million. Non-gaming revenue rose 9 percent to $192.8 million.

The company said the attractions business at its Resorts World Sentosa resort achieved strong results, in particular, Universal Studios Singapore, S.E.A. Aquarium and Adventure Cove Waterpark.

“Our mass gaming business delivered stable performance. Our VIP rolling volume continued to grow, and we remain prudent in our credit extension,” the company said at the time.

On Wednesday, RHB said that it expects Genting’s prudent credit extension to continue despite the slowdown in gaming volume from Macau.

“This should be able to attract and retain higher volumes of premium and VIP customers, which in turn will lead to a bigger gaming market share,” said the brokerage.

Looking into projects in the pipeline, RHB said it was optimistic about Genting’s reinvestment proposal for RWS, even though it is in the discussion stage only.

Genting’s moves in the Japan IR market is also a plus.

“In our view, it stands a chance to win, due to its strong net cash position ($2.9 billion in 18Q3) and track record as an integrated resorts casino operator in Singapore that adheres to stringent regulatory requirements,” says RHB.

RHB said that share price excitements this year will be driven by IR related news from Japan.

The brokerage also expects non-gaming to continue to deliver for Genting.