Coronavirus concern for Genting Malaysia Berhad

A leading investment bank has reportedly cut its upcoming annual earnings estimate for Asian casino operator Genting Malaysia Berhad by some 58% owing to an expected coronavirus-induced drop in future visitation.

According to a report from Inside Asian Gaming, the declaration from Maybank Investment Bank Berhad was contained within an assessment written by analyst Samuel Yin Shao Yang after Malaysia introduced a new movement control order across six of its states. The source detailed that this directive covering Sabah, Johor, Selangor, Melaka, Penang and the Federal Territory of Kuala Lumpur is set to run until January 26 and bars all interstate travel in addition to any movement between the affected areas.

Partial pool:

Genting Malaysia Berhad is responsible for its home nation’s giant Resorts World Genting development and recently recorded a third-quarter loss of $178.43 million as it continues to come to terms with the impacts of the coronavirus pandemic. Yin reportedly noted that this situation is likely set to get even worse as approximately 75% of the visitors to this flagship Malaysian facility are day-trippers who live in Selangor and the Federal Territory of Kuala Lumpur.

Escalating alarm:

The new movement control order was reportedly implemented by Malaysian Prime Minister Muhyiddin Yassin yesterday after the daily coronavirus infection rate for the nation of approximately 32.73 million people passed 3,000. The country is now purportedly dealing with almost 31,000 active cases of the potentially-lethal contagion, which is over double the previous high of roughly 14,000 seen during the latter half of November.

Rapid reaction:

Genting Malaysia Berhad has reportedly responded to the implementation of the new movement control order by announcing that it intends to operate Resorts World Genting at reduced capacity and under revised operating for the next three weeks. However, Yin purportedly explained that these severe restrictions may end up lasting considerably longer to possibly scupper any gains being anticipated in association with next month’s Chinese New Year celebrations.

Reportedly read the assessment from Yin…

“The previous movement control order that required Resorts World Genting to shut operations was implemented on March 18, 2020, and was scheduled to last for two weeks but Resorts World Genting only re-opened three months later on June 19, 2020. As the number of new coronavirus cases in Malaysia are a lot higher currently, we gather that the movement control order in Selangor and Kuala Lumpur will last for a similar three months at least. This may cause Resorts World Genting to forego the Chinese New Year peak season and raises doubts if Genting SkyWorlds will open in the second-half of 2021.”