KUALA LUMPUR (March 29): Nomura has maintained its “buy” rating of Genting Malaysia Bhd (GenM), and raised its earnings estimates for the gaming company, citing continued growth in overseas visitor arrivals, including from China.

In a report on Wednesday (March 29), gaming industry publication Inside Asian Gaming said that in a note on Tuesday, Nomura analysts Tushar Mohata and Alpa Aggarwal said they had raised their revenue estimates for Resorts World Genting (RWG) by 6% to RM6.6 billion in 2023, and by 13% to RM7.7 billion in 2024.

This is on the back of a likely higher visitor count of 26.4 million this year and 28.8 million next, compared with 22 million in 2022, aided by RWG bringing more hotel rooms online post Covid-19.

The analysts also expect improving visitations to RWG’s theme park, SkyWorlds, after two months of heavy rain in January and February dampened some visitations in what they said is usually a seasonally strong quarter.

“That said, school holidays and drier weather in March should help the overall performance for the quarter,” the analysts wrote.

Group-wide, Mohata and Aggarwal said the potential sale of GenM’s land parcel in Miami, Florida could prove a “windfall” for the company’s bottom line, and provide an opportunity to submit a powerful bid for a downtown New York casino licence.

Nomura said should GenM be successful in selling the land parcel at close to US$1.5 billion (RM6.6 billion), this would generate a large windfall for the company, and also would result in a RM5.5 billion gain on disposal.

“This will also help improve the balance sheet of GenM after years of capital expenditure, a Covid-19-related slowdown, and generous dividends, which resulted in net debt to equity rising from 19% as of end-2019 to 71% as of end-2022.

“We believe the cash proceeds are likely to be retained within the company for the time being, to help fund the downstate New York gaming licence, should GenM be successful in the bidding process,” said Mohata and Aggarwal.

At the time of writing on Wednesday, GenM was unchanged at RM2.58 a share, with 2.34 million shares traded.