GENTING: Core Profit Surpasses Expectations Amidst Mixed Performance, Driving Up Valuation

Investment bank TA Securities has maintained its “Buy” recommendation on a major gaming and hospitality conglomerate, raising its target price following the company’s nine-month 2025 (9M25) core profit exceeding both internal forecasts and consensus estimates. The positive outlook is largely driven by anticipated strong seasonal factors in the fourth quarter.

Performance Review

The conglomerate’s 9M25 core profit reached RM83.4 million, representing 53.5% of TA Securities’ full-year forecast and 10.7% above consensus estimates, a performance deemed above expectation. This positive surprise occurred despite a broader 12.2% year-on-year (YoY) slump in 9M25 adjusted EBITDA to RM6.2 billion, with revenue remaining largely flat at RM20.8 billion.

The decline in adjusted EBITDA was primarily attributed to “lacklustre performance” across various casino units in Singapore, the UK, and the US. However, this was partially mitigated by robust earnings contribution from Resorts World Genting in Malaysia. While Genting Singapore’s 9M25 adjusted EBITDA saw a 12% YoY decline, its third-quarter 2025 (3Q25) adjusted EBITDA demonstrated a strong 36% YoY growth, supported by a recovery in VIP rolling volume and win rates. Conversely, Genting Malaysia’s 9M25 adjusted EBITDA contracted by 5% YoY. The performance of Resorts World Las Vegas was particularly challenging, with its 9MFY25 revenue and adjusted EBITDA declining by 20.1% and 64.1% YoY respectively, due to lower visitation amid macroeconomic uncertainty and weakened margins from earlier quarters.

Future Outlook and Valuation

Looking ahead, TA Securities anticipates the positive trends to persist into the fourth quarter of 2025, with specific events like the Formula I Las Vegas Grand Prix in November expected to significantly boost Resorts World Las Vegas’s performance. Management expresses optimism for 2026, foreseeing a vibrant calendar of events, conventions, and concerts in Las Vegas.

The investment bank also highlighted the conglomerate’s increased stake in Genting Malaysia, now at 63.4%, noting that while an offer for privatisation expires in December, achieving a 75% stake remains challenging given the current share price. Reflecting these developments, TA Securities has raised its earnings projections for FY25-27 by 38.9%, 8.2%, and -9.0% respectively. Consequently, the firm has uplifted its Sum-of-Parts (SOP) valuation for the company to RM4.20 per share, from the previous RM3.44, while reaffirming its “Buy” call.