Genting Bhd’s (GENT) 4Q23/FY23 results were within expectations. Positively, RWG, RWS and RWLV all continue to recover (ramp in RWLV’s case) and the trend is expected to continue going into FY24E.
Maybank Investment Bank Berhad (Maybank IB) said today (Mac 1) they have trimmed the FY24E/FY25E EPS by 4%/5% and introduce FY26E earnings.
Consequently, Maybank IB also trimmed their SOP-TP to MYR5.73 from MYR5.84 based on an unchanged 60% discount to SOP/shr.
Maybank IB likes GENT as a cheaper proxy to GENS and GENM. They expect its discount to SOP/shr to narrow if the MYR recovers.
Maybank IB maintains BUY with lower SOP-TP of MYR5.73 (-2%)
Core earnings and dividends met expectations
4Q23 core net profit of MYR305.4m (+178% YoY, -41% QoQ) brought FY23 core net profit to MYR1.21b (+1,291% YoY) which came in at 99% of our FY estimate. As a secondary check, FY23 EBITDA of MYR9.05b (+20% YoY) was also within their expectations at 101% of our FY estimates.
The final DPS of 9sen brought FY23 DPS to 15sen which was in-line at 100% of Maybank IB’s FY estimate. On RWLV, 4Q23 EBITDA of USD58.2m was another post-opening high (+24% YoY, +12% QoQ) as operations ramped.
Both RWG and RWS ought to do well going forward
For RWG, Maybank IB noted that 4Q23 RWG visitor arrivals grew to 5.8m (+9% YoY) or c.95% of 4Q19 levels which is a post-COVID high. For FY24, Maybank IB expects RWG visitor arrivals to recover another 12% YoY to reach the FY19A high of 24.0m on inbound tourism into Malaysia.
For RWS, the high margin 4Q23 mass market GGR hit 110% of 4Q19 levels. Going forward, we expect RWS mass market GGR to hit 120% of FY19 levels on recovering Chinese tourism.
Trim FY24E/FY25E EPS estimates by 4-5%
Following Maybank IB’s revised GENS (link), GENM (link) and GENP (link) estimates, they have trimmed the FY24E/FY25E EPS by 4%/5%. The lower EPS estimates are largely due to higher impairments of trade receivables and depreciation at GENS. Maybank IB also introduced their FY26E earnings.
Utilising their revised TPs for GENS (SGD1.16 vs. SGD1.21 previously), GENM (MYR3.26 vs. MYR2.93 previously), GENP (MYR6.21 vs. MYR6.00) and ascribing an unchanged 60% discount to SOP/shr, we trim our SOP-TP to MYR5.73 from MYR5.84.
