Genting Malaysia’s earnings to grow with New York expansion

PETALING JAYA: CIMB Research has upgraded Genting Malaysia Bhd to “buy” from “hold”.

The research house also raised its target price for the integrated casino resort operator by 6% to RM2.70.

Last month, Genting Malaysia was awarded a full licence for its of Resorts World New York City (RWNYC) operations, currently operating as a” racino”, a combined horse racing track or other live betting facility.

The company has allocated US$5.5bil to convert the racino into an integrated casino resort, the first phase of which is expected to start operations in the second quarter of this year.

CIMB Research said its higher target price factored in the earnings boost from the RWNYC casino operations.

This was partly offset by a rollback in the assumption of a US$300mil debt reduction for the company’s Empire Resorts Inc, which owns Resorts World Catskills (RWC), following a delay in the sale of RWC’s non-gaming assets.

“We acknowledge that Genting Malaysia’s share price may take some time to re-rate as investors could stay on the sidelines until Genting Malaysia delivers strong core earnings-per-share (EPS) growth in 2027, driven by RWNYC,” the research house said.

It also does not expect dividends in the 2025 and 2027 time frame, as the company conserves cash to reduce debt and partly fund RWNYC’s expansion.

The shares currently trade at 7.4 times enterprise value over forecast earnings before interest, taxes, depreciation and amortisation for this year, or a 20% discount to its 10-year pre-Covid 19 mean.

The research house has cut this year’s core EPS forecast by 8% to factor in the higher interest cost on debt raised by RWNYC to pay for the upfront licence fee and capital expenditure for the initial phase of expansion, while taking into consideration that new table games (250 out of a total 800) would not be sufficient to offset the impact.

“However, we have raised our core EPS estimate for next year by 25% on the full-year impact from table-games operation and an increase to 400 tables by next January.

“After the revisions, we expect Genting Malaysia’s core EPS to dip slightly by 1% year-on-year (y-o-y) this year before surging 39% y-o-y in 2027,” the research house added.

In the third quarter ended Sept 30 last year (3Q25), Genting Malaysia’s net profit dropped 79% y-o-y to RM119.7mil, mainly due to lower foreign exchange gains.

This translated to an earnings per share of 2.11 sen.

This was despite higher revenue, which increased by 22% y-o-y to RM3.4bil, contributed by better performance from the leisure and hospitality business in Malaysia, Britain, Egypt, the United States and the Bahamas.

In Malaysia, the group’s leisure and hospitality operations recorded a 19% increase in revenue to RM1.99bil, mainly driven by higher overall business volumes in the gaming segment at Resorts World Genting.

For the nine-month period ended Sept 30, 2025 (9M25), the group’s net profit fell by 14% to RM609mil, or an earnings per share of 10.75 sen.

Revenue saw an 8% uptick y-o-y to RM8.9bil in the 9M25, mainly from the leisure and hospitality businesses across all geographical segments due to a higher volume of business.