Genting poised to ride recovery and upside

PETALING JAYA: Genting Bhd is poised to benefit from the continued earnings recovery of its key subsidiaries, Genting Malaysia Bhd (GenM) and Genting Singapore Ltd (GenS), supported by stronger tourist arrivals in Malaysia and Singapore.

According to Hong Leong Investment Bank (HLIB) Research, the recovery in both countries will be largely underpinned by improving travel flows from key Asia-Pacific source markets.

In Singapore, the momentum will be further reinforced by the rollout of high-profile attractions such as Illumination’s Minion Land, Mandai’s Rainforest Wild Asia and the Disney Adventure Cruise Ship.

Meanwhile, Malaysia stands to benefit from its official assumption of the Asean Chairmanship in 2025.

During this period, Malaysia will host over 300 related meetings, programmes and summits throughout 2025.

This momentum will continue into Visit Malaysia Year 2026, said the research house.

Some notable development to monitor in the second half of the year is the much-anticipated Resorts World New York City (RWNYC)’s bid for a full-scale commercial casino licence in downtown New York.

Currently operating with more than 6,500 video lottery terminals and electronic table games, RWNYC, which is an indirect wholly-owned subsidiary of GentM, must secure one of the three available licences to offer Las Vegas-style slot machines and table games.

On June 27, RWNYC officially submitted its proposal to the New York State Gaming Commission, competing against seven other bidders, with the three winners to be selected on Dec 1, 2025.

RWNYC plans a capital expenditure of US$5.5bil to transform itself into a world-class integrated resort by 2030 – featuring 6,000 slot machines, 800 gaming tables, 2,000 hotel rooms and a wide range of lifestyle and entertainment offerings.

“According to RWNYC’s proposal, gross gaming revenue is projected to more than double by 2027.

“Based on our estimates, securing the full casino licence could unlock RM0.31 per share in additional value for GenM.

“We believe its potential could be interesting, as many New York City residents currently travel out-of-state for table gaming. But to be conservative, we will only incorporate the uplift into our target price upon a successful bid outcome,” HLIB Research said in a report.

Coming to the number forecast operator ( O), the research firm expects Sports Toto Bhd’s O segment to deliver stable revenue growth, supported by a growing population and rising household income.

On the other hand, the outlook for Sports Toto’s UK-based luxury car distribution arm, H.R. Owen Plc, would remain challenging because sales volumes in the high-end automotive segment are likely to be weighed down by the continued outflow of high-net-worth individuals from the United Kingdom and persistently high interest rates.

“Separately, we note some investor unease following Sports Toto’s recent related-party transaction in late June 2025 involving the acquisition of three freehold commercial units at Berjaya Times Square, which has raised concerns around the group’s capital allocation discipline.

“Hence, we take this opportunity to lower the target price-earnings multiple on the group to 8.5 times (previously 10 times on average), resulting in a lower target price of RM1.39 (from RM1.60) and a downgrade to hold.

“While HLIB Research maintains a ‘neutral’ stance on the gaming sector, its preferred stock pick is Genting, which it has a ‘buy’ call on and a target price of RM4.44.”

It said the stock is strategically positioned to capitalise on the recovery momentum of both GenS and GenM, as well as the potential value-add from 20%-owned associate TauRx Pharmaceutical once the latter’s Alzheimer’s drug, HMTM, receives approval from the US Food and Drug Administration.