RGB outlook points to strong rebound

PETALING JAYA: The long-term outlook for RGB International Bhd, an electronic gaming machine and equipment manufacturer is intact but the company is facing a softer outlook this year due to regulatory and geopolitical headwinds.

Phillip Capital Research, which has maintained a “buy” call on the stock but with a lower target price of 59 sen from 70 sen, said the company’s outlook for the second half of this year appears muted.

It said the group’s prospects are weighed down by regulatory and geopolitical headwinds across key operating markets, leading to a slower rollout of new gaming projects and electronic gaming machine placements.

“Heightened regulatory caution in the Philippines following the May 25 mid-term elections, amendments to the Philippines Inland Gaming Operator framework and integrated resort (IR) ownership changes have delayed project approvals and disrupted operations,” Phillip Capital Research said.

The research house said Cambodia continues to grapple with lingering border tensions with Thailand, constraining expansion plans and dampening technical support activity amid softer cross-border tourism flows.

“We remain positive on RGB’s long-term growth trajectory, with a strong recovery anticipated in 2026.

“The slowdown in 2025 is mainly due to project delays rather than structural weakness, as underlying demand remains intact,” Phillip Capital Research said.

“We expect 2026 to mark a strong rebound, driven by the resumption of deferred projects, new IRs opening, ongoing upgrade programmes, and the introduction of new gaming products that were initially slated for rollout this year.

“We forecast electronic gaming machine sales to rebound strongly to 4,200 units in 2026,” it said.

RGB expects to deliver 2,000 electronic gaming machines this year, largely driven by replacements.

It said sentiment towards the stock has been subdued amid a softer earnings outlook.

“However, strong earnings recovery supports a valuation re-rating ahead, with RGB trading at an undemanding 3.5 times price-to-earnings, with potential dividend yield of 14% (assuming a 50% payout).