Maybank cuts GEN Malaysia earnings due to casino closures

A broker said it had cut its 2020 revenue estimate for casino operator Genting Malaysia Bhd by a third after the company's Genting Highland casino resort was closed until March 31 amid the country's own coronavirus alert.]

A note from Maybank Investment Bank Bhd focused on the closure of its flagship property, Resorts World Genting, Malaysia's only casino resort on the outskirts of the capital Kuala Lumpur.

On Tuesday, the casino company also announced the temporary closure of Resort World Casino New York City in New York State and a U.S. venue called Resort World Catskills.

"We now assume that the gaming volume and visitor numbers at Resort World Genting will be down 30% year-over-year over six months," Maybank said in a note on Tuesday, referring to the Malaysian venue. "The above net impact is to reduce our full-year 2020 revenue estimate by 33%."

Samuel Insaoyang, an analyst, said the revision takes into account "the surge in COVID-19 cases in Malaysia."

"Previous 2020 full-year revenue estimates were essentially based on Resorts World Genting's game volume and a 20% year-over-year drop in visitor arrivals over the three months," he said.

On a more optimistic note, Mr. Yin observed that "visitors will come back" if the closure of Resorts World Gending is not extended beyond March 31.

"Our channel checks from Macau indicate that China may ease outbound tourism restrictions in April or May 2020 as the number of new COVID-19 cases in China plunges," the agency said, noting that Chinese tourists accounted for more than 5% of Resort World Zenting's total visitor arrivals in 2019.

A statement from Resort World Casino New York City said the closure, which it said was imposed "temporarily," was decided after "a careful review by the New York Hotel Trade Commission with New York state officials and partners."

Resorts World Catskills, also in New York state, said the closure for all guests was also "temporarily" imposed and would take effect at noon local time on Tuesday. It did not elaborate on the closure period but noted that "all entertainment scheduled until April 30 has been postponed."

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