KUALA LUMPUR: The implementation of vaccinated travel lanes (VTL) should help with Genting Bhd's road to recovery, said Kenanga Research.
According to Kenanga Research, both Genting Malaysia Bhd and Genting Singapore will see better earnings from 4QFY21 with the relaxation of interstate and cross border travelling and operation restrictions.
This will eventually benefit parent company Genting.
Kenanga Research said a better outlook is seen for Genting Singapore particularly as borders slowly reopen.
"Genting Singapore's earnings are expected to improve further with the implementation of VTL which currently allows fully vaccinated travellers from 12 countries to enter Singapore without quarantine."
By November 15, travellers from Korea will be the next to join the VTL list.
"There are more countries expected to list in the VTL and this will hasten economic recovery in the island-state which should benefit Genting as well.
"As such, a recovery to pre-pandemic level is likely to be seen in 2022," Kenanga Research said.
It said Genting Singapore had reported a weak set of third quarter (Q3) financial year 2021 results on lower revenue.
This brought Genting Singapore's nine months of financial year 2021 core profit to S$137.5 million which made up 59 per cent of market consensus' estimate.
"However, earnings are expected to pick up in the year-end holiday season in Q4 2021 with the implementation of VTL that allows business and leisure travel from designated countries," it said.
For now, pending the release of the group's Q3 2021 results later this month-end, Kenanga Research is keeping its "Outperform" call on Genting with the target price of RM6.47.
"Risk to our call on Genting is a prolonged Covid-19 pandemic continuing to restrict travelling and hence affecting its casino operations," it said.