GENTING: Gaming Operator Faces Near-Term Headwinds, Investment Bank Maintains Buy on Future Catalysts

TA SECURITIES has maintained its “BUY” recommendation for a prominent gaming operator despite its core profit for the first half of 2025 (IH25) falling below market expectations. While the investment bank revised its sum-of-parts (SOP) valuation to RM3.39 per share (down from RM3.56 previously), it asserts that the recent sell-down in the stock is overdone, anticipating upcoming catalysts to drive future performance.

Performance Review

The group reported an IH25 core profit of RM83.4 million, significantly missing market forecasts. This underperformance was primarily attributed to weaker-than-expected contributions from gaming operations in Singapore (GENS) and Resorts World Las Vegas (RWLV), alongside higher-than-expected tax expenses. Adjusted EBITDA for IH25 slumped 14.8% year-on-year to RM4.1 billion, with revenue declining 7.0% year-on-year to RM13.3 billion. No dividend was declared for the second quarter of 2025, signaling a cautious stance amid current challenges.

Specifically, Genting Singapore’s (GENS) IH25 adjusted EBITDA saw a 25.8% year-on-year decline. This was largely impacted by a high-base effect from a strong first quarter in 2024, elevated operating costs, and the temporary closure of the S.E.A. Aquarium. Resorts World Las Vegas (RWLV) also experienced a significant downturn, with IHFY25 revenue and adjusted EBITDA falling 25.6% and 69.4% year-on-year, respectively. This dismal performance was attributed to lower business volume and increased payroll costs.

Partially offsetting these declines was a strong recovery in Malaysia operations. Genting Malaysia’s (GENM) IH25 adjusted EBITDA expanded by 24% year-on-year to RM1.8 billion, despite moderate revenue growth of 1.5%. This was primarily driven by the robust recovery in Malaysian operations and favorable foreign exchange gains, which helped mitigate some of the broader group’s challenges.

Future Outlook and Recommendation

In light of the challenging performance, TA SECURITIES has adjusted its FY25-27 earnings projections downwards by 35.6-65.1%, reflecting revised earnings estimates for GENS and RWLV. The investment bank also trimmed its dividend projections for the same period.

Despite these revisions, TA SECURITIES remains optimistic about the group’s longer-term prospects, particularly in the second half of 2025. Key events anticipated to drive earnings higher include the Formula 1 Las Vegas Grand Prix in November, expected to boost Resorts World Las Vegas, and the reopening and rebranding of the Singapore Oceanarium in July 2025, which should significantly benefit Genting Singapore. The “BUY” rating is maintained, with the firm indicating that the current market valuation does not fully reflect the company’s potential given these forthcoming catalysts.