The gaming sector is set for a strong recovery in the second half of 2024 (2H24), driven by rising tourist arrivals and favorable regulatory changes, according to Hong Leong Investment Bank Research (HLIB Research). The research house maintains an “overweight” stance on the sector, citing several key factors supporting this optimistic outlook.
Casino operators such as Genting Singapore Ltd and Genting Malaysia Bhd are expected to see continued earnings recovery in 2H24 and beyond. This recovery is underpinned by the restoration of global flight capacity and the visa-free travel agreements between China and both Malaysia and Singapore. Genting, which owns significant stakes in both Genting Singapore (52.7%) and Genting Malaysia (49.5%), is well-positioned to benefit from this trend.
Despite resilience in 2023, travel volumes to Malaysia and Singapore from China are still below 2019 levels, suggesting further room for growth. Malaysia aims to attract 27.3 million foreign tourists in 2024, up from 20.1 million in 2023 and 26.1 million in 2019. Similarly, Singapore targets 15 to 16 million visitors in 2024, compared to 13.6 million in 2023 and 19.1 million in 2019.
“Resorts World Genting and Resorts World Sentosa are poised to benefit significantly from the recovery of Chinese tourist arrivals, a crucial client segment for the gaming industry,” HLIB Research noted.
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