The reopening of facilities at Genting Malaysia’s Resorts World Genting last week is expected to help the company reach breakeven in 4Q21, the first time it will have done so in over 18 months.
According to a note from Maybank Investment Bank analyst Samuel Yin Shao Yang, the reopening – prompted by rising vaccination rates – came a month earlier than had been anticipated and bodes well for a sharp rise in visitation in the coming weeks as more facilities open and the property launches its long-awaited theme park, Genting SkyWorld.
“We are optimistic that this will drive Genting Malaysia to breakeven in 4Q21 after what is likely six consecutive quarters of core net losses,” Yin writes.
“Catalysed by the opening of Genting SkyWorld in 4Q21, we expect RWG visitor arrivals to further recover to pre-COVID-19 levels from FY22E onwards.”
In the meantime, Yin says Genting Malaysia can expect to post a similar loss in Q3 to the MYR353.4 million (US$84.5 million) loss posted in Q2, with gains made at its US and European casinos tempered by the closure of Resorts World Genting for the entire quarter, since 1 June 2021.
With the Malaysian IR now open again to Pahang residents and expected to welcome visitors from across the country once the national vaccination rate hits 90% in the coming weeks, visitation is tipped to reach around 3 million in 4Q21 – around half the pre-COVID level of 6.2 million visitors in 4Q19.
Yin also points to the Genting SkyWorld launch as a key catalyst for the company.
“We maintain our view that it will open in December 2021 to coincide with the school holidays,” he says.
“Going forward, we are confident that it will attract both gaming and non-gaming visitors to Resorts World Genting. Our FY22E/FY23E core net profits (US$249 million in 2022 and US$305 million in 2023) are based on Resorts World Genting visitor arrivals of 24.2 million and 26.2 million.
“In short, we expect some sort of normalcy resembling pre-COVID-19 levels to return in FY22.”
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