CGS International has cut its FY24F/25F/26F core EPS estimates for Genting Malaysia by 31.5%/25.3%/13.6% mainly due to higher tax rate assumptions noting the group has fully utilised its tax incentives from the Genting Integrated Tourism Plan.
The house has also increased the operating costs of RWG to take into account the higher service tax of 8% incurred by its gaming operations since 1 Mar 2024. Despite lowering earnings estimates, CGS still expects GENM to post a strong 3-year EPS CAGR of 42% in FY23-26F, driven by Resorts World Genting (RWG). CGS sees RWG's revenue growing by 10.5%/9.7%/5.2% in
FY24F/FY25F/FY26F, with a recovery in total visitors to RWG helping to drive business volume and EBITDA growth.
Foreign and domestic tourists to lift RWG revenue past all time high
Data from Tourism Malaysia indicated that total tourist arrivals in Malaysia in 1H24 rose 29% yoy, with Chinese tourist arrivals in the same period almost triple of 1H23 and Jun 24 arrivals surpassing the corresponding 2019 period for the first time since the pandemic.
According to China's National Immigration Administration, 7.59m entries and exits of mainland Chinese travellers were recorded during China's National Day holidays (1-7 Oct 2024), up 33.2% yoy. This comes as China's international airline capacity (number of seats) to Malaysia has exceeded pre-pandemic levels since Jun 24 according to available Official Airline Guide (OAG) data and is expected by end-2024 to continue increasing. Further, the Department of Statistics Malaysia (DOSM) reported that Malaysia's domestic tourism sector saw 127m visitors in 1H24, up 21.5% yoy, with domestic tourism
expenditure up 27% yoy to RM52bn. We believe that domestic and foreign tourist arrivals and spending would only get stronger heading into 2H24F, which should drive business volumes and lift RWG's revenue past FY19's all-time high.
Retain Add with a lower SOP-based TP of RM3.65
CGS retains its Add call on GENM, as it expects a robust 3-year EPS CAGR of 42% in FY23-26F, supported by the recovery in tourism and growth in RWG's revenue. The house lowers its SOP-based TP to RM3.65 following earnings adjustments and rolling forward the base year to FY25F. GENM is currently trading at 13.4x CY25F P/E, 1 s.d. below its historical pre-Covid-19 mean P/E of 18x. Key re-rating catalysts are stronger-than expected Malaysian operations and operating margins. Downside risks are higher-than expected operating costs and slower Malaysia gaming revenue recovery.
CGS International已将马来西亚云顶24财年/25F/26F的核心每股收益预期下调了31.5％/25.3％/13.6％，这主要是由于更高的税率假设，该集团已充分利用了云顶综合旅游计划中的税收优惠措施。
考虑到自2024年3月1日以来其博彩业务产生的8％的更高服务税，众议院还增加了RWG的运营成本。尽管下调了盈利预期，但CGS仍预计，在云顶名胜世界（RWG）的推动下，GenM在 FY23-26F 中将实现强劲的3年每股收益复合年增长率为42％。CGS预计，RWG的收入将在今年增长 10.5%/9.7%/5.2%
24财年/25财年/26财年，RWG的访客总数有所回升，这有助于推动业务量和息税折旧摊销前利润的增长。
国内外游客将使RWG收入突破历史新高
马来西亚旅游局的数据显示，24年上半年马来西亚的游客人数同比增长29％，同期中国游客的入境人数几乎是23年上半年的三倍，6月24日的入境人数自疫情以来首次超过2019年同期水平。
根据中国国家移民管理局的数据，在中国国庆节假期（2024年10月1日至7日）期间，有759万中国大陆旅客出入境，同比增长33.2％。在此之际，根据官方航空指南（OAG）的数据，自6月24日以来，中国飞往马来西亚的国际航空运力（座位数）已超过疫情前的水平，预计到2024年底将继续增加。此外，马来西亚统计部（DOSM）报告称，马来西亚国内旅游业在24年上半年接待了12700万游客，同比增长21.5％，其中国内旅游
支出同比增长27％，达到520亿令吉。我们认为，在 2H24F 来临之前，国内外游客的入境和支出只会增加，这将推动业务量并使RWG的收入超过2019财年的历史新高。
以较低的基于 SOP 的 TP（3.65 令吉）保留 AddCGS保留了对GenM的加权看涨期权，因为它预计，在旅游业复苏和RWG收入增长的支持下，FY23-26F 的3年每股收益复合年增长率将达到42％。在调整收益并将基准年延至 FY25F 之后，众议院将其基于标准股权标准的目标股价下调至3.65令吉。GenM目前的交易价格为 CY25F 市盈率的13.4倍，比COVID-19之前的历史平均市盈率18倍低1秒。关键的重新评级催化剂是马来西亚的业务和营业利润率高于预期。下行风险是运营成本高于预期，马来西亚博彩收入恢复放缓。
