Rising number of tourists to lift Genting's earnings
Nevertheless, the market remains bullish on the conglomerate, with the majority of analysts keeping a 'buy' call.
In fact, UOB Kay Hian Research (UOBKH Research) upgraded its rating to 'buy' after Genting's results announcement on May 29.
Genting, which dropped off the FBM KLCI list last December, saw lower than-expected contributions from gaming operations in Singapore, Malaysia, Britain and the United States in the first quarter of the year (1Q25).
Despite higher contributions from the plantations and power businesses, Genting's adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) slumped 22.7% year-on-year (y-o-y) to RM2bil with revenue dropping 12.4% y-o-y to RM6.5bil.
Following this, TA Research cut its earnings for this year (FY25) by 47% and 68% for FY26.
This was done after revising lower the earnings forecasts for Genting Singapore Ltd and Resorts World Las Vegas, as well as incorporating Genting Malaysia Bhd 's (GenM) revised earnings projections.
UOBKH Research, on the other hand, believes GenM's profitability remains intact.
However, it said it thinks that unfavourable capital management, a potential capital expenditure upcycle that may pressure gearing, and finance costs may result in longer period of valuations de-rating.
'Key re-rating catalysts include winning another New York casino tender. With the share price correcting 19% year-to-date, valuations appear depressed below the mean with a palatable 5.5% to 7% dividend yield,' the research house said.
Hong Leong Investment Bank Research (HLIB Research) said it has cut its earnings forecast for Genting by 26% for FY25 and 27.6% for FY26.
HLIB Research, which is one of the research houses that has cut its target price for the Genting, continues to like Genting for its well-established operational presence across diverse regions, mitigating regulatory and geographical risks.
Going forward, it expects Genting to benefit from the stronger tourist arrivals in both Singapore and Malaysia.
'Besides, Genting has the potential value-add with its stake in TauRx Pharmaceutical Ltd in Scotland if its drug, hydromethylthionine mesylate (HMTM) receives US Food and Drug Administration approval.'
Genting has a 20.3% stake in the pharmaceutical company.
On GenM, Kenanga Research expects the company to see 'better days beyond FY25'.
It said Resorts World Genting is seeing more local visitors, along with Singaporeans and Indonesians.
Mainland Chinese and Indian tourists are also expected to increase as Malaysia builds up momentum towards welcoming 36 million visitors in Visit Malaysia 2026.
'The Ebitda margin is expected to improve marginally and gradually from current 26% towards 27% to 25% over FY25 to FY26 on improving visitor numbers.
'GenM's US operations should see softer but still firm earnings from Resorts World New York City on rising risk of slower local economic growth coupled with full consolidation of still loss-making Empire Resorts Inc.
'The group's British and Egypt operations are also expected to report firm earnings with rising risk of some softening,' added Kenanga Research.
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