The research house maintained its earnings forecasts on holding company Genting Bhd as it believes there is limited downside risk given the current share price level.
“Malaysian gaming operations only account for about 35% of GENT’s EBITDA. Hence, the potential earnings impact on GENT (estimated to be about -10%) is relatively small compared to Genting Malaysia, which derives the bulk of its earnings from Malaysia,” it said.
PublicInvest maintained its outperform rating on Genting with an unchanged target price of RM10.70.
According to PublicInvest, Genting Singapore’s 3QFY18 revenue and adjusted EBITDA were flattish with the gaming segment, representing 70% of the group’s revenue, delivering a 1% decline in revenue.
The non-gaming segment posted 9% revenue growth on the back of higher visitorshp and average visitor spend while the hotel business continued to outperform the industry with an average occupancy rate of over 97%.
Ebitda was unchanged at about S$320mil.
PublicInvest added that impairment on trade receivable increased sequentially from under S$1mil to S$13mil due to higher credit extension on stronger VIP business although overall credit policy remained prudent.
The research house said medium-to-long-term catalysts for Genting include Genting Singapore’s possible venture into the Japanese gaming market, expansion of Resorts World New York and the completion of an integrated resort in Las Vegas.