PETALING JAYA: Considering expenses related to a stronger ringgit, Phillip Research has lowered its headline profits projections for Genting Malaysia Bhd for the upcoming years.
The brokerage reported a 9% fall to its 2025–2026 earnings prediction and a 1% reduction in its 2024 earnings target.
The research firm still advises investors to buy the stock on price weakness, pointing out that the company is currently trading at a 7% dividend yield and an undemanding 6.6 times the 2025 enterprise multiple (corporate value over earnings before interest, taxes, depreciation, and amortization).
The survey also noted that foreign visitors, who make up about 20% of total arrivals in the second quarter of 2024 (2Q24), may be hampered by the ringgit’s dramatic increase in value relative to regional currencies over the last three months.
According to Phillip Research, Chinese visitor arrivals more than doubled year over year in 2Q24, although they are still 38% lower than before the closure.
Stronger-than-anticipated travel from Singapore and Indonesia helped to offset the shortfall, and together they contributed to a 15% increase in international visitors in 2Q24.
“Foreign arrivals were strong in July and August, reaching about 96% of pre-lockdown levels, indicating that 3Q24 may see a sequential increase in hilltop visits.”
Because it thinks the tourist recovery is still strong, the brokerage keeps its visitation assumptions the same.
With a target price of RM3.30 per share, the research firm recommends buying the company.