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Maybank IB: Genting hopes to open Genting SkyWorlds for Chinese New Year

KUALA LUMPUR (Jan 10) : After a delay in opening Genting SkyWorlds, Genting Malaysia Bhd (Genting) is “ironing out” software issues and hopes to open the outdoor theme park for Chinese New Year which falls on Feb 1, 2022, said Maybank Investment Bank (Maybank IB) citing its channel checks.

Its analyst Yin Shao Yang said in a note last Thursday that his channel checks also revealed that Resorts World Genting’s (RWG) 4Q21 visitorship was robust despite the opening of Genting SkyWorlds being delayed yet again.

Yin earlier expected Genting SkyWorlds to open on Dec 10, 2021.

According to Yin, RWG’s 4Q21 visitorship was comparable to 3Q20 (four million), thanks to a high vaccination rate, and the number of new Covid-19 cases and deaths in Malaysia easing.

Yin also added that other indicators showed that the upcoming Chinese New Year will be a good one for RWG.

Citing Google Mobility Retail and Recreation Index, which measures interest in retail and recreation relative to pre-Covid-19 times, he said the index indicates that Malaysians are a lot more comfortable being outdoors these days, which is very positive for RWG.

He also cited Google Trends, which measures search interest in a particular term, where Yin said the index indicates that RWG is “front of mind” for many Malaysians during holidays.

“If the Omicron variant is kept at bay, the upcoming Chinese New Year ought to be good for RWG,” said Yin.

Meanwhile, Yin revised up Genting’s earnings estimates for the financial year ended Dec 31, 2021 (FY21) by 2%.

However, he trimmed its earnings forecasts for FY22 and FY23 by 5% and 6%.

“Although we now defer our expectation on the opening of Genting SkyWorlds from 4Q21 to 1Q22, our FY21 estimated loss before interest and tax is narrowed by RM51 million as we expect Genting SkyWorlds to be loss making. Our FY22 and FY23 estimated earnings before interest and tax are unchanged,” he said.

On another note, he raised Genting’s net interest expense estimates by RM63 million per annum to reflect 3Q21 results.

Yin maintained a buy call on Genting and revised down its target price to RM3.38, from RM3.40.

“We continue to like Genting as a liquid recovery play,” he said.

At the time of writing, Genting fell one sen or 0.35% to RM2.88, valuing the group at RM17.16 billion.


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