Hong Leong Expects Genting Malaysia To Recover In Second Half Of The Year

Genting Malaysia, the renowned global leisure and hospitality company, has received good news from the analysts at Hong Leong Investment Bank, who expect the casino operator to recover well in the second half of 2022.

Hong Leong Investment Bank is one of the top financial institutions in Malaysia and its analysis of Genting Malaysia concluded that stock market investors should buy shares in this company at the moment.

Genting Malaysia did return to profitability in the first quarter of 2022, but the actual figures missed analysts’ expectations. That failure was due, according to analysts at Hong Leong, to a mismatch between supply and demand on the market. While Genting Malaysia was spending more money in order to open their resort, demand dropped due to the spread of the Omicron variant of the novel coronavirus.

However, now the pandemic situation seems under better control, which is a very good sign for the company. Genting Malaysia is the only casino operator in the country, owning a recently revamped resort in the Genting Highlands.

The company spent nearly 2.5 billion dollars to boost the capacity of its property, adding more hotel rooms and expanding the casino as well. Moreover, Genting unveiled the SkyWorlds theme park at this venue in February.

Even though the investment has not entirely paid off yet, the analysts at Hong Leong Investment Bank expressed their belief that the resort will act as “an anchor” for the group’s financial recovery in the second half of the year.

The analysis pointed out that pandemic-related restrictions in Malaysia have eased, while international tourists are starting to come back into the country after the borders reopened. The fact that the Malaysian ringgit is quite weak at the moment makes the country an even more attractive destination for foreign tourists.

The SkyWorlds theme park should also allow Genting to attract more customers. “Prior to the opening of the theme park, the main attraction in Resorts World Genting (RWG) was its casino, which tends to attract, adult, non-Muslim crowds,” the analysis from Hong Leong said. “The opening of SkyWorlds allows RWG to attract a large and previously untapped Muslim market, which represents about 63 percent of Malaysia’s population.”

An earlier report from RHB Investment Bank, released at the beginning of 2022, also expected Genting Malaysia to record a profit this year, mainly thanks to the decreasing impact of the novel coronavirus pandemic.

SOURCE: . Asia Gaming Brief. July 5, 2022.