KUALA LUMPUR: Over the recent past quarter, Genting Bhd faced challenges in returning to profitability as it was dragged by Resorts World Genting (RWG) and Resorts World Las Vegas (RWLV).

       However, the outlook on both properties for the subsequent quarters is looking brighter.

       "RWG is expected to recover on the back of capacity increase in hotel operations, contribution from SkyWorlds, and the weak RM currency which augurs well for both local tourism and foreign visitations," said Hong Leong Investment Bank (HLIB) research.

       As for RWLV, the seasonally strong spring and summer season and the relaxation of Covid-19 restrictions will augur well for a strong rebound, it said.

       "Current quarter hotel occupancy has seen improvement from 54% in Jan to 85% in March," it added.

       Genting recorded a 1Q22 core loss after tax and minority interests (Latami) of RM194.4mil, which was below HLIB's and consensus full-year forecasts of RM174bil and RM1.21bil respectively.

       Subsequently, HLIB cut its FY22 and FY23 forecast earnings by 50.2% and 33% respectively to account for the weaker showing and slower recoveries from RWG and RWLV.

       However, the research firm maintained its "buy" call and revised its target price higher to RM6.50 on upgrades to subsidiaries Genting Malaysia and Genting Plantations.

       In the coming quarters, HLIB expects the group's earnings to be supported by a recovery in its leisure and hospitality segment, a lower share of losses from its joint ventures and sustained high crude palm oil and oil prices.

       "We like Genting for its deep expertise and experience in managing the gaming and hospitality businesses and its well spread operations across different regions which help to mitigate regulatory and country risks.

       "Furthermore, Genting provides an exposure to RWLV which we believe will have a strong growth potential in the longer term," it said.