Genting Malaysia’s flagship resort, Resorts World Genting (RWG), anticipates a substantial 60% surge in earnings for 2024, a promising outlook outlined by Maybank’s analyst Samuel Yin Shao Yang. The prediction stems from the recovery of visitor arrivals to pre-COVID levels, which is expected to bolster the casino giant’s performance.
Recovery in Visitor Arrivals and Market Dynamics
Maybank’s forecast is based on a positive uptick in visitor arrivals, projected to reach 24 million in 2024, up from 21 million the previous year. Notably, the resurgence is anticipated to be primarily fueled by the return of international tourists, particularly from Indonesia and China, two significant pre-COVID source markets that have not fully recovered yet. However, recent developments such as Malaysia’s extension of 30-days visa-free entry to Chinese visitors bode well for this revival.
Impact of Visitor Dynamics on Earnings
Yin emphasized that although Malaysian and Singaporean visitation has rebounded to pre-pandemic levels, the recovery of Indonesian and Chinese visitations remains pivotal. The reestablishment of air connectivity and the relaxation of visa regulations are anticipated to contribute significantly to Genting Malaysia’s financial rebound. Despite an impending service tax hike from 6% to 8% effective March 1, 2024, Maybank projects a remarkable 60% year-on-year recovery in Genting Malaysia’s FY24E earnings.
Dividend Expectations and Potential Growth Catalyst
In light of this recovery, Genting Malaysia’s anticipated earnings surge is likely to facilitate dividends of 15 sen per annum, reflecting an attractive yield of at least 5.4%. Furthermore, the potential acquisition of a full casino license in New York could substantially elevate both earnings and share prices. If Resorts World New York City secures this license, it is anticipated to reignite foreign interest in Genting Malaysia shares, particularly as the current foreign shareholding is at a multi-year low of 15% as of September 30, 2023.
Genting Malaysia’s positive outlook for 2024 relies heavily on the anticipated recovery in visitor arrivals, particularly from key international markets. The company’s resilience, coupled with potential catalysts such as visa relaxations and a prospective casino license in New York, positions it favorably for substantial growth in earnings and shareholder interest.