Bank slashes GEN Malaysia 2024-25

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Maybank Investment Bank Bhd is lowering its 2024 and 2025 revenue forecasts for Resorts World Genting (pictured), the operator of Resorts World Genting (pictured), the only licensed casino complex in Malaysia, by 4% and 5%, respectively. It says this comes as the country's service tax has risen by 2 percentage points.
The adjustment to the forecast represents a core net profit of MYR 913 million ($191.7 million) for next year and MYR 1.01 billion for 2025. 안전놀이터
"The increase in the service rate is effectively a 'game tax' increase for Resorts World Genting," analyst Samuel Insao said in a note Thursday.
He added that Genting Malaysian executives could take "relief measures."
The company could "cut junket commission rates or VIP rebate rates to mitigate the impact of higher service taxes, raise hotel room rates, and delay pay increases and rations and energy consumption," said In.
The "other catalyst" for Genting Malaysian investors is that the group "has succeeded in fully securing casino licenses in New York City and recouping its Mashify Wampanoag investment," the analyst said.
The latter was a reference to an old and stalled tribal game project proposal in the U.S. state of Massachusetts.
Maybank noted that Malaysia's service tax rate - effective March 1 next year - will rise from 6% to 8% now, according to the Malaysian budget proposed on October 13.
Resort World Genting is paying a "service tax" on behalf of gamblers, In noted.
Maybank mentioned 2026 in its latest budget announcement for fiscal 2024 and said it would be designated locally as the "Year of Visit Malaysia," with a goal of 26.1 million foreign tourists and tourism spending of MYR 97.6 billion.
In 2024, it will cost MYR $350 million for tourism promotions, and arrival visas will be available for certain eligible travelers. Maybank said other forms of conditional entry, such as social visit passes and multiple entry visas, could be easier to obtain, according to a government announcement.
"We hope the current 15% shortfall in resort World Genting visitor arrivals will be reduced compared to 2019, and we hope to see more tourists from major source markets such as China and India," said Maybank analyst.