Hong Leong Investment Bank (HLIB Securities) has maintained its HOLD call on Genting Malaysia with a lower target price of RM2.00. Analysts said 1QFY26 results came in below expectations due to weaker revenue and margin pressure, alongside concerns over softer travel demand and ongoing operational volatility in the US and UK.
Genting Malaysia reported a 1QFY26 core loss of RM0.5 million, compared with a core profit of RM53.4 million in the previous quarter and RM31.1 million a year earlier. Analysts said the results missed both internal and consensus estimates, mainly due to weaker-than-expected revenue and EBITDA margin as operating leverage turned unfavourable.
Revenue fell 4.8% quarter-on-quarter, dragged by softer performance in Malaysia, the UK and Egypt, while the US and Bahamas segment also declined.
Despite a 10.5% year-on-year rise in revenue, driven by stronger contributions from the US and Bahamas following consolidation of the GERL Group, the group still slipped into a loss due to higher operating and payroll costs linked to union agreements and minimum wage increases. Ramp-up expenses for the transition of Resorts World New York City into a commercial casino also weighed on earnings.
HLIB highlighted that disruptions linked to geopolitical tensions, including higher airfares and flight cancellations, could soften discretionary travel demand to Malaysia and affect visitor traffic to Resorts World Genting. It also noted continued uncertainty across US and UK operations, including losses at Empire Resorts.
The research house cuts FY26 and FY27 earnings forecasts, with HLIB trimming projections by 31% and 24.2%, respectively.
The stock price decreased by 2.02% to RM1.94.
