Technical tracker - HLIB Retail Research – 3 February 2022 GE | HLeBroking

Technical tracker - HLIB Retail Research – 3 February 2022

GENM (RM2.73) – Improving sentiment ahead of the opening of SkyWorlds and positive 4Q21 results

GENHK fiasco is likely priced in. To recap, Genting Hong Kong Ltd (GENHK) filed to wind up on 19 Jan after failing to secure funding to help it stay afloat amid the insolvency of its German shipbuilding subsidiary. Sentiment was also dampened by speculations that Tan Sri Lim may bail out GENHK with financial help from entities within the Genting Group or some form of financial manoeuvre to recoup investment losses. Nevertheless, we believe that most of the negative developments have been discounted.

At RM2.73, GENM is trading at undemanding 15x FY22 E P/E (10% and 37% discount to its 10Y average of 16.7x and regional peers’ average of 23.7x, respectively) coupled with an attractive yield of 6.0%. Overall, we believe that the liquidation of GENHK has no direct impact on GENM as these two companies have no cross-shareholding with GENHK (Figure #1). Also, we do not expect GENM to face solvency risk as its net gearing was 70% in 3Q21 (vs GENHK’s 136% in 1HFY21) and majority of its revenue is coming from the gaming and hospitality (GENM: 96%) segments. We expect GENM’s 4Q21 and FY22 results to improve further on the back of pent-up demand from local tourism (accounts for >70% of its visitations) whilst the long-awaited SkyWorlds theme park is slated to launch on 8 Feb and will improve overall visitations.

Trying to establish a double bottom. After our successful call on GENM in Dec 2021 (reports), GENM had again retraced back to its immediate support near RM2.75 area after closing the RM2.89-RM2.94 gap on 28 Dec 2021. Technically, any weakness from the current base building supports of RM2.70-2.75 will provide a good buying opportunity. A successful breakout above its resistance of RM 2.80 will spur the prices toward RM2.97-RM3.17 levels. Cut lost at RM2.64.


Collection range: RM2.68-2.70-2.73

Upside targets: RM2.97-3.00-3.17

Cut loss: RM2.64

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