Japanese brokerage Nomura's view in a Friday note on Genting Malaysia Bhd, which operates casinos in the United States, the Bahamas, the United Kingdom and Egypt.
Analysts Tushar Mohata and Alpha Aggarwal wrote, "We expect Genting Malaysia's next growth phase to come from capital investments in Malaysia, which have become the company's growth funding stream and have increased visits and revenue." They are reportedly referring to an ongoing overhaul at Resorts World Genting, known as the Genting Integrated Tourism Plan or "GITP." The plan includes a 10 billion yuan ($2.4 billion) spending program over 10 years.
Nevertheless, Genting Malaysia has been continuously involved in tax incentives for GITP in recent years, and some analysts have said it could serve as a drag on the potential of a shake-up to improve GITP's balance sheet.
Citing separate tax issues, it cited the announcement of higher gaming taxes that apply to the company's flagship Malaysian properties and a lawsuit in the United States over Nomura's postponement, which used to be an outdoor theme park under the Fox brand. "Recent punitive gaming tax increases and theme park disputes are likely to dampen EBITDA [earnings before interest, taxation, depreciation and amortization] growth, but we think the stock has already considered more than negative."
The impact of the higher gaming tax will be evident in May, the time of Genting Malaysia's first-quarter earnings release, the brokerage said. Nomura said a Malaysian court decision on judicial review pursued by the company on the issue of GITP tax incentives was due by September.
Other "major milestone dates" investors should consider for the remainder of 2019 and into 2020 in connection with the theme park-related litigation.
"The court stipulated that a fact finding and reconciliation meeting should be held by December 31, 2019, a request for summary judgment by April 13, 2020, and that trials should begin on July 14, 2020, if not previously reconciled," Nomura noted.
BY: 바카라사이트
