Maybank Investment bank has cut its 2024 earnings forecasts for Genting Malaysia by 15% on expectations that the company’s mass gaming revenues will take a hit following the recent closure for renovations of two gaming floors at the company’s flagship Malaysian property, Resorts World Genting.
As reported by Inside Asian Gaming, the Circus Palace and Hollywood mass gaming floors were closed for renovations on 28 February, with Maybank IB analyst Samuel Yin Shao Yang stating in a Monday note that mass market GGR looks set to “take a backseat” in 2024 while renovations are completed.
However, he expects earnings to bounce back from 2025 onwards assuming both gaming floors reopen by year’s end to capitalize on the holiday period.
Yin, who visited RWG last week, added, “We were positively surprised on how crowded [the still operational] Sky Casino was considering it was a weekday morning. The obvious explanation is that gamblers who used to patronise the Circus Palace and Hollywood mass gaming floors were patronising Sky Casino.
“Smatterings of Mainland Chinese accent could be heard, suggesting decent gaming participation by Chinese tourists. We also notice that the ‘NO SMOKING’ signs at tables have been removed, which we believe is positive for table yields.”
Based on an assumption that 50% of mass gaming business from the shuttered Circus Palace and Hollywood gaming floors will migrate to the Sky Casino, Yin has lowered his mass gaming forecast for RWG alone by 19%, resulting in a net impact cut of 15% to the company’s FY24 earnings.
“Anyhow, we maintain FY25/FY26 earnings which are premised on RWG total GGR recovering to 104%/106% of FY19 levels [respectively],” he wrote.
“History has shown us that RWG GGR grows after gaming floors are expanded or renovated.”
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