We recently met with Genting Malaysia’s management following the release of its 4QFY12 results. All in, we remain upbeat on the group’s prospects as we continue to like the earnings visibility of its Malaysian operations. The potential expansion of its UK and US businesses would help spur growth going forward. Maintain BUY, with our SOP-based FV tweaked lower to MYR4.13 from MYR4.21.

New hotel tower at Genting Highlands. Plans are underway to build a new hotel tower at Genting Highlands. We believe this could potentially translate into a new revenue stream of MYR20m-MYR30m p.a. Going forward, we believe the earnings contribution from its Malaysian operations would remain fairly sturdy, growing at 2%-3% p.a.

RW at NEC to open in 2015. Construction works on the proposed Resorts World Birmingham at the National Exhibition Centre (NEC) have started since February this year. The GBP150m seven-storey complex covering 538,000 sq ft will include a conference centre, hotels, restaurants, cinemas and retail outlets. Notably, gross gaming space will take up 50,000-60,000 sq ft. We estimate that this new casino could potentially lift group earnings by around 1%-3% upon commencement of operations.

New casinos likely in upstate NY. The Governor of New York State, Andrew Cuomo, was recently quoted as saying that he plans to award gaming licences to three casinos in the upstate of New York. To benefit the state’s coffers, we believe the authorities would strategically position these new casinos in densely-populated areas. We expect Genting Malaysia to participate in the potential open tender or application for the full-fledged gaming licences.

Condominiums in Miami. As for its proposed venture into Miami’s gaming scene, we understand that the group’s initial plan to build a USD3.8bn casinocum-hotel complex on its contiguous 30-acre site overlooking Biscayne Bay has been shelved. Instead, Resorts World Miami is now proposing to build condominiums, a 5-star hotel, waterfront restaurants, and related amenities on the existing 5-acre site, on which the Miami Herald building currently sits.

Source: RHB