$GENM (4715.MY)$ Facing concerns about the appreciation of the Ringgit and the possibility of being removed from the composite index, Phillip Capital has decided to lower its profit forecast for the company while making minor adjustments to the target price, but still maintains a 'buy' rating.
An analyst at Phillip Capital pointed out that Genting Malaysia should see a higher number of visitor arrivals in the third quarter of this year, but in the current trend of a stronger Ringgit, it may affect the number of foreign tourists in the future.
"Foreign tourists accounted for about 20% of the total number of visitors to Genting Highlands in the second quarter of this year, and the rapid appreciation of the Ringgit in the past three months may affect foreign tourists coming to Malaysia."
In any case, the analyst stated that although the number of Chinese tourists is significantly lower compared to before the outbreak of the pandemic, the overall number of foreign tourists in Genting Highlands remained strong in July and August, reaching approximately 96% of the pre-pandemic level.
"We do not change the current expectations of visitors to Genting Highlands because we believe that the recovery of the domestic tourism industry is still on track."
In addition, based on the latest market capitalization performance, the analyst believes that Genting Malaysia is likely to be removed from the index components list in the semi-annual review in November this year, and once this happens, the stock will be unable to rise in the short term. This is because the funds linked to the exchange index need to readjust their investment portfolios.
Market cap has dropped to 36th place.
"Genting Malaysia's market capitalization has fallen to 36th place on the Malaysian stock exchange, and its constituent status is expected to be raised to 25th place." $GAMUDA (5398.MY)$ The one replaced.

$HIBISCS (5199.MY)$
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