Recently opened Resorts World Las Vegas and a pair of other US casinos buoy the case for Genting Malaysia stock, according to Nomura analysts.
Genting Malaysia is part of the sprawling industrial conglomerate known as Genting Berhad, which is the official owner of the Las Vegas Strip integrated resort. The Malaysian unit owns 100 percent of Resorts World New York City (RWNYC) and nearly half of Resorts World Catskills (RWC) in upstate New York.
The $4.3 billion Resorts World Las Vegas opened two months ago, and while the owner isn’t yet breaking out revenue figures for the new venue, the debut of the latest Strip casino-resort was well-timed, because Sin City is rebounding more rapidly than other major global gaming markets.
We believe the reopening momentum in US casinos has been strong so far, with gross gaming revenue (GGR) in most cases already above pre-COVID-19 levels,” said Nomura analysts in a recent note.
The research firm rates Genting Malaysia “buy,” and has a “neutral” grade on Genting Berhad.
US Becoming Vital Market for Genting
Malaysia-based Genting Berhad is a vast business empire controlling an assortment of gaming and leisure properties, a commercial real estate outfit, a cruise line, a health care unit, and more.
Through its various units, the company has stakes in dozens of casinos worldwide. But the aforementioned US venues are taking on added importance at a time when the operator’s Malaysian gaming venues are closed. Additionally, the Genting Singapore business has been hamstrung by temporary closures at Resorts World Sentosa, and it might miss out on the chance to bring an integrated resort to Yokohama after that Japanese city elected a new mayor that’s opposed to casinos.
In the second quarter, GGR at Resorts World New York City surged 27 percent on a quarter-over-quarter basis, while the comparable metric at Resorts World Catskills soared 42 percent.
“This is all the more encouraging as inbound tourism to the US, especially from Asia, is still very limited. We believe US operations will remain a key pillar for Genting and Genting Malaysia earnings, given the higher vaccination coverage in the US and the lower appetite for harsh lockdowns,” according to Nomura.
US Listing Possible
Immediately following the opening of Resorts World Las Vegas, some analysts speculated that the debut of that venue could set the stage for Genting to list a stock in the US.
The company previously had a New York listing in the form of Empire Resorts, which controlled Resorts World Catskills. But Genting Malaysia took that unit private in 2019 amid financial woes.
It’s possible that a new Genting US equity could be entirely focused on Resorts World Las Vegas, or that it could be an umbrella company consisting of that property, the New York assets, Resorts World Bimini Resort and Marina in the Bahamas, and a 30-acre parcel of land in Miami the company owns.
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