KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB) remains bullish on Genting Bhd's prospects, citing the anticipation of a sustained rebound in foreign tourist arrivals to both Malaysia and Singapore.
The recent visa-free travel agreement between China and these two countries is anticipated to boost Genting Singapore (GENS) and Genting Malaysia (GENM) earnings for the financial year 2024 (FY24), it said in a note.
HLIB's research underlines the continued recovery in tourist arrivals to Malaysia as a key investment theme for 2024. With significant ownership in GENM (49.3 per cent) and GENS (52.6 per cent), Genting Group is strategically positioned to leverage the recovery momentum of both entities.
Additionally, HLIB highlights the significant uptick in the tourism sector following Taylor Swift's series of six sold-out concerts in Singapore from March 2–9, her exclusive stop in Southeast Asia, which had a positive spill-over effects on GENS.
In March 2024, Singapore witnessed a notable increase in tourist arrivals, with a three per cent month-on-month rise and an impressive 45 per cent year-on-year surge.
Preliminary data from CoStar suggests that daily hotel occupancy rates in Singapore exceeded 70 per cent in March, with a significant surge in spending via credit and debit cards on UOB's payment infrastructure during the week of March 4–10.
HLIB maintains its positive outlook on Genting, emphasizing its well-established operational presence across diverse regions, which helps mitigate regulatory and country-specific risks.
The bank also notes that Genting's shares are presently undervalued, failing to fully reflect the potential resurgence of both GENS and GENM.
Furthermore, HLIB observes that Genting is trading at an 8.0 per cent discount to the assessed value of its stake in GENS.
The bank indicates that Genting seems to be forming a support base in the RM4.47 to RM4.53 range, with indications of an upward bias.
HLIB anticipates that a breakout above RM4.60 could drive the share price towards the range of RM4.79-4.86-4.95, suggesting a cut loss level at RM4.36.
