COVID-19 impact now likely to result in FY2021 loss for Genting Malaysia: Maybank Research

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Maybank Research has revised down its estimates for Genting Malaysia over the next three years, with the Malaysian-based casino operator now expected to record a loss in 2021 and reduced profit through 2023.

According to a note from analyst Samuel Yin Shao Yang, Genting Malaysia is tipped to record a loss of MYR384.8 million (US$84.6 million) in 2021 due to the recent surge in COVID-19 cases across the country. Yin has also lowered his 2022 profit estimate by 17% to MYR1.03 billion (US$249.9 million) and 2022 estimate by 4% to MYR1.27 billion (US$308.2 million).

However, he has identified a range of events that could lead to a dramatic increase in profit and a potential 25% increase in Genting Malaysias share price.

First, history suggests that Genting Malaysias share price will rally pre-opening of Genting SkyWorlds, Yin writes, pointing to the upcoming launch of the new theme park at Resorts World Genting.

We [also] believe that Resorts World New York City (RWNYC) is well positioned to be awarded a lucrative downstate commercial casino license. We opine that 49%-owned Empire Resorts will be less burdensome going forward, we [and] we gather that the Mashpee Wampanoag promissory notes may be written back.

Should both RWNYC be converted into a downstate commercial casino and the promissory notes be written back, Genting Malaysias 2023 earnings could be boosted by around 63% or MYR800 million (US$194 million), he said.