RGB: Gaming Equipment Provider Poised for Strong Growth on EGM Demand and Cost Savings

A prominent gaming equipment provider is anticipating a robust start to 2026, with significant quarter-on-quarter (QoQ) growth expected in 1Q26. This positive outlook is largely driven by a substantial spillover of Electro-Mechanical Gaming (EGM) unit shipments from December 2025 into the current quarter. Management projects approximately 700 deferred units, representing roughly 20% of its full-year shipment target for 2026, will be delivered, boosting initial performance.

Performance Review

The company’s EGM sales momentum is set for a strong recovery throughout 2026, with management guiding for total EGM deliveries of 3,500 units, a notable increase from 2,300 units in 2025. This growth is primarily fueled by a rebound in replacement demand, estimated at 2,000-2,500 units, alongside an additional 1,000-1,500 units from a new integrated resort (IR) in the Philippines. Vietnam is also emerging as a key contributor, expected to account for approximately 10% of 2026 sales. With one new IR slated for the Philippines in 2026, two more in the development pipeline, and one IR opening in Vietnam, the company is strategically positioned to benefit from a broader regional gaming capital expenditure upcycle.

While the Technical Services Management (TMS) segment is expected to face soft conditions in 1H26 due to ongoing Cambodia-Thailand tensions, which led to the temporary closure of three out of four Poipet outlets in 3Q25, the company is actively implementing consolidation and cost optimisation measures. These initiatives are expected to mitigate the near-term impact, paving the way for a more meaningful recovery in the second half of 2026.

Future Outlook & Strategic Expansion

Beyond established markets, the company is also pursuing new growth avenues, with its Middle East licence application in the final stages. Distribution approval for this region is anticipated by 2Q26, opening up a new market. Financially, the company maintains a robust net cash position, equivalent to approximately 27% of its market capitalisation, providing a strong buffer and supporting future growth. Expected earnings delivery is also anticipated to translate into an attractive dividend yield of approximately 14%.

Analyst Recommendation

In light of these positive developments and attractive current valuations ahead of a recovery year, the investment bank reiterates its “BUY” recommendation.