Over the last 2 weeks, newswires reported 2 events that are significant to Genting Malaysia, first, the RFA process for 3 downstate commercial casino licenses in New York State has resumed, which Maybank IB says it gathered favours for the group and secondly, the Mashpee Wampanog tribe, which is indebted to Genting, could be trying to revive construction of its own integrated resort, the FLRC.
The house added under a ‘blue sky’ scenario, the long-term (FY25E) earnings estimates could be lifted by 74% and DCF-TP could be raised by 31% to MYR3.62. RFA process for 3 full casino licenses in NYC back on After more than 6 months of silence, the New York State Gaming Commission resumed the RFA process for 3 downstate commercial casino licenses on 30 Aug 2023. Maybank has long viewed GENM’s 100%-owned RWNYC to win 1 as it can deploy table games and generate additional tax revenue for New York State quickly, thanks to its existing infrastructure. Maybank’s calculations indicate that a downstate commercial casino license can accrete incremental core net profit of c.MYR610m and MYR0.53 of target price.
MW tribe looking to revive construction of FLRC?
In a 4 Aug 2023 letter, the Mashpee Wampanoag (MW) tribe formally requested a meeting with the Taunton City Council to discuss its First Light Resort & Casino (FLRC) whose construction has been abandoned. Recall that GENM impaired MYR1.8b (MYR0.32/shr) of its MW promissory notes in 3Q18 due to the tribe’s legal woes. If the MW promissory notes are written back, the core net profit estimates will be boosted by c.MYR180m p.a. and TP will be raised by MYR0.32.
Should both catalysts materialise under a ‘blue sky’ scenario, our long-term earnings (FY25E) estimates could be lifted by 74% and DCF-TP could be raised by 31% to MYR3.62. The ‘blue sky’ TP implies an attractive upside potential of 40%.
