Genting shares climb on 3Q earnings surprise

KUALA LUMPUR: The trading stock of Genting Bhd got a shot in the arm following the release of its quarterly results yesterday, which revealed better-than-expected earnings.

Shares in the conglomerate opened 14 sen or 3.2% higher at RM4.50 a share on Friday.

In a stock exchange filing yesterday, Genting announced 3Q23 core profit after tax, amortisation and minority interest (Patami) of RM642.7mil, which represented a 137.3% jump year-on-year, bringing 9M23 core Patami to RM1.16bil.

The positive surprise to the earnings was due to stronger-than-expected contribution from Genting’s joint venture and associates, as well as interest income, Hong Leong Investment Bank (HLIB) Research said in its results note.

The research firm added it expects continued upward momentum for the group, citing continued foreign visitation recovery at both Resorts World Genting and Resort World Singapore (RWS) as global flight frequency, especially from China, continue to recover.

It also expects spillover benefits to RWS from a series of prominent music concerts scheduled in late 2023 and 2024 as well as growth in convention visitations and major events in Las Vegas, which is expected to underpin the performance of Resorts World Las Vegas.

After adjusting its forecasts for FY23-25 by 9-19%, HLIB maintained its “buy” recommendation on Genting with a slightly higher target price of RM6.96.

“We continue to like Genting for its extensive expertise in managing gaming and hospitality businesses, coupled with a well-established operational presence across diverse regions, mitigating regulatory and country risks,” it said.

HLIB added that Genting is undervalued at current valuations, which do not adequately reflect the recovery potential of both Genting Singapore and Genting Malaysia, along with the growth prospects of Resorts World Las Vegas.

Additionally, it said Genting is currently trading at a 16% discount to the value of its stake in Genting Singapore.