[ad_1]
KUALA LUMPUR (September 22): RHB Research Institute said the worst is over for Genting Malaysia Bhd (GenM), as it believes the “current valuation of the group is attractive to position for a cyclical recovery.”
The research house maintained its “buy” call for the group, with a target price (TP) of 2.59 yuan, which represents an increase of 23% over its current share price of 2.11 yucca.
“We recently visited Resorts World Genting (RWG), and the significant improvement in visitor arrivals reaffirmed our positive view of the pace of recovery after the reopening.
“The gradual relaxation of social distancing rules was evident in the casino, with three or four standing guests now allowed to place bets, in addition to those of seated guests,” RHB analyst Loo Tungwye said in a note today.
With international borders still closed, Loo said that RWG will benefit from domestic tourism as Malaysians can only travel within the country.
“We believe the pace of recovery will accelerate further with the gradual relaxation of social distancing rules and the possible discovery of a vaccine,” he said.
“Management previously indicated that daily visitor arrivals had increased by 50% since the reopening,” he added.
Loo believes GenM has reached its tipping point, where nearly all of its facilities have reopened, fueled by an encouraging business recovery.
“As the world approaches a possible Covid-19 vaccine, GenM is a clear beneficiary of a cyclical recovery. The stock is still trading at a minimum valuation of 5.5 times the FY21F EV / Ebitda (company value / earnings before interest, taxes, depreciation and amortization forecast for the financial year ending December 31, 2021), that is, with a discount> 50% on its value. regional average of pairs of 12 times ”, said the analyst.
He added: “Additionally, GenM’s generous dividends (a 5% yield) will support its share price and continue to reflect its strong balance sheet.”
Loo, however, highlighted some risks related to his call including a slowdown in the Covid-19 recovery, changes in luck factor, and regulatory risks.
At the time of writing, GenM’s shares had risen two sen or 0.95% to 2.13 yuan, bringing its market value to RM12.6 billion.
[ad_2]
