The research house report said: “The recent dip in sector share prices due to Omicron concerns presents an opportunity for investors to accumulate, as we do not expect the impact to be as severe as in 2020-2021. Earnings recovery should pick up pace due to the easing of movement restrictions once the situation stabilises.”
RHB Research mentioned its top pick for casino operators is Genting Bhd because it provides investors with a cheaper alternative to position for the tourism recovery play angle.
The research house described Genting’s newly launched Resorts World Las Vegas (RWLV) to be “a potential value-unlocking monetisation”, which is “another major upside catalyst” for Genting.
Genting and sister company Genting Malaysia Bhd (GenM) are both expected to return to profitability in 2022.
RHB Research said: “Many countries are now better equipped and nimble in handling the pandemic. Coupled with the massive cost rationalisation efforts undertaken previously by the casino operators, these should partially cushion the impact. Both the casino operators will resume recovering after the Covid situation stabilises.”
As per the report, Genting is on a positive trajectory since RWLV is expected to continue seeing better earnings in the upcoming quarters, while GenM’s Resorts World New York City could obtain a downstate commercial casino licence and provide further earnings.
The report ended with the importance of casino operators adressing problem-gambling issues: “Casinos are often blamed for compulsive gambling habits, causing damage to families and individuals. Casino operators need to play their part in helping those who exhibit compulsive gambling behaviour.”
