KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB) research said that Genting Bhd's shares are undervalued at its current price, as it does not sufficiently capture the potential recovery of both Genting Singapore (GENS) and Genting Malaysia (GENM).
"Moreover, Genting is currently trading at an 8 per cent discount to the assessed value of its stake in GENS," it said in its technical tracker note today.
"Genting is building a base at the RM4.47-4.53 support region, with indicators showing uptick bias. A successful breakout RM4.60 will spur the share price toward RM4.79-4.86-4.95. Cut loss at RM4.36," it added.
HLIB research has a target price of RM7.12 for the stock.
Its share price opened at RM4.53 a share today.
"We continue to see the ongoing recovery in tourist arrivals to Malaysia as a key investment theme for 2024," HLIB research said.
"Genting Group stands out as a good proxy, given its strategic holdings in GENM (49.3 per cent) and GENS (52.6 per cent), positioning the group to leverage the recovery momentum of both entities," it said in a note.
Meanwhile, HLIB said Taylor Swift's series of six sold-out concerts in Singapore (from March 2-9 and her only stop in Southeast Asia), sparked a significant boost to the tourism sector, with positive spill-over effects expected for GENS.
In March 2024, it said Singapore recorded 1.48m tourist arrivals, marking a 3 per cent month on month (MoM) increase and a 45 per cent year on year (YoY) surge.
"Preliminary data from CoStar indicates that daily hotel occupancy rates in Singapore exceeded 70 per cent in March, with spending via credit and debit cards using UOB's payment infrastructure surging 35 per cent WoW from March 4-10," it said.
HLIB continues to like Genting for its well-established operational presence across diverse regions, mitigating regulatory and country risks.
Genting's outlook remains bright supported by the anticipation of a sustained rebound in foreign tourist arrivals to both Malaysia and Singapore, said The bank said this is driven by the recent visa-free travel agreement between China and the two nations, which is expected to bolster GENM and GENS financial year 2024 (FY24) earnings. Ends
