[Shortlist] Genting Malaysia Berhad (GENM MK)
GENM released Q2’26 earnings last Thursday 20 August. Net profit collapsed -93% YoY!
Yet, just 3 days before, you highlighted a potential opportunity in GENM.
Incompetent…
I suggest shortlisting GENM for further research. It is a potential 2x.
Didn’t you just hear what I said? Net profit fell -93%!
Public Investment Bank warned:
“The results came in below our and consensus estimates… visibility remains weak at this juncture given the uncertainty surrounding the health of the US economy.”1
Three things.
First, profits fell largely because of forex and startup costs at Genting New York (GENNY). Too much focus on a single quarter’s results is causing investors to underestimate GENNY’s growth.
Second, alternative data shows GENNY’s revenue growth accelerated in Q3’26.
Finally, I estimate GENM holds hidden assets worth ~73% of its market capitalisation or 30% of enterprise value.
Alright. I’ll hear you out.
Remind me: what’s the liquidity?
24 Aug 2026
Share price: MYR 1.70
Market capitalisation: MYR 9,635 mn (USD 2,384 mn)
Enterprise value (EV): MYR 22,874 mn (USD 5,659 mn)
Average daily volume (ADV): MYR 3 mn (USD 0.7 mn)
NTM P/E: 19x
What does GENM do?
GENM operates casinos.
It owns a casino monopoly in Malaysia. Resorts World Genting is a popular holiday spot for locals and Singaporeans. This makes up ~ 51% of total revenue in H1’26.
GENNY operates only one casino: Resorts World New York. I estimate GENNY accounted for ~29% of total revenue.
~14% revenue comes from the UK and Egypt, where GENM operates over 30 casinos.
Source: GENM
Just like any other casinos, gaming operations contribute ~ 75% of total revenue. The remaining 25% comes from hotel rooms, food and beverages and entertainment.
For the major casinos, can you break their revenue down into number of tables/slots, drop and win?
GENM does not disclose that, sadly. But even without that level of detail, we can still see the under-recognised growth.
Under-recognised growth
You say the consensus focused too much on the profit decline in Q2’26. Why are you not worried?
I am not worried. Profit fell in Q2’26 mainly because:
(A) MYR 129 mn gain on acquisition of a subsidiary in Q2’25 did not recur.
(B) Higher pre-operating expenses at GENNY
(C) USD depreciated against MYR last year. This created significant unrealised gain on USD borrowings. This did not recur.
Source: GENM (2026)
It’s natural for GENNY to make losses while it is ramping up operations.
GENNY received its full commercial casino license in December 2025. It launched its initial phase of full commercial casino operations ahead of schedule on 28 April 2026. 242 live tables alongside 2,500 slot machines.
Before the casino opens, you need to hire and train staff, etc. Utilisation rate will initially be low too. It takes time for customers to know about the new casino.
While GENNY ramps up, a better performance measure might be growth in revenue and gross profit?
Yes.
On that measure, GENNY is performing very well. Revenue growth accelerated in Q3’26.
Source: New York State Gaming Commission (2026)
Hold on. You said GENNY opened on 28 April 2026. Why are there data on revenue growth before April 2026?
Before 28 April 2026, GENNY operated a racino. No slot machines and live table games allowed.
I see. This chart gives a lot of visibility over revenue growth. Is this the alternative data you mentioned at the start?
Yes. GENNY submits revenue data to the regulator every week.
This data is useful. It has not reached consensus yet. I only know one sell-side research house that tracks this.
Surprising.
Great. How about the long-term growth potential?
An independent market study estimates GENNY will earn ~ USD 3,300 mn annual revenue by 2031, when all three casinos are fully operational.2
This translates into MYR 13,200 mn incremental revenue from GENNY. For context, GENM’s total revenue was only MYR 11,884 mn in 2025.
Here’s another way to look at this.
Fitch estimates that by 2028, GENNY will increase GENM’s EBITDA by almost +45%.3
However, consensus seems to have not fully recognised this growth potential. Sell-side forecasts EBITDA in 2028 will only be ~ 14% higher.
Nice. But isn’t leverage quite high?
GENM generates ~ MYR 2 bn operating cash flow every year. Over the next 5 years, it still has ~ MYR 2 bn annual capital expenditure for GENNY. Net debt is already high at ~ MYR 14 bn.
Financial leverage looks high, but it is actually not that high.
GENM’s investment properties are worth MYR 9 bn but the company only reports MYR 2 bn. This hidden value of MYR 7,042 mn is ~ 73% of today’s market capitalisation and ~ 30% of enterprise value.
Source: GENM (2025)
The largest and most valuable portion is located in Miami, Florida.
These include 1 Herald Plaza, a vacant waterfront development site of ~ 246,390 sq. ft. It is also the former site of the Miami Herald building.
If required, GENM can raise additional cash by selling these properties. In fact, in 2023, it did try to sell four parcels of vacant land in Miami for USD 1.2 bn. But the deal eventually fell through.
Potential privatisation
In October 2025, parent Genting Berhad (GENT MK), offered MYR 2.35 per share to acquire all remaining shares it did not already own.
Why did the privatisation fail?
Independent advisor Kenanga Group assessed fair value between MYR 3.48 and MYR 3.77.
While GENT successfully increased its stake from approximately 49.3% to 73.8%, it did not receive enough acceptances from shareholders to reach the regulatory thresholds required for delisting (75%) and compulsory acquisition (90%).
There are signs that GENT may try again later this year.
The New York State Gaming Facility Location Board seems concerned over GENT’s apparent lack of control over GENM:
While Genting Berhad (GENT), Genting Malaysia Berhad (GENM), and Lim family trusts have historically supported U.S. Resorts World projects with capital and credit enhancements, GENT reportedly lacks legal authority to influence management or operations of the proposed facility [GENNY].4
Could this scenario be true: GENT has no intention of privatising GENM, but it made the offer in October 2025 to cement its control?
If GENT simply wanted >50% ownership, it could have just bought more shares on the market.
Prior to the offer, GENT held a 49.36% stake in GENM (which rose to 49.999% just before the offer through open-market purchases).
GENT launched an unconditional voluntary take-offer. This suggests they intend to privatise GENM.
I doubt GENT can privatise GENM by itself. GENT already has so much debt. Net debt ~ MYR 29 bn vs operating cash flow of only ~ MYR 6 bn.
If GENT offers MYR 3.50 per GENM share, its net debt will increase by almost 70%!
Yes. GENT will likely have to rely on other sources of funding. Perhaps partnering with a private equity firm?
Regardless of financing, there are signs that the new CEO is keen.
“It is a time to pause and rethink what can be done next,” CEO Tan said. “We have the capability to advance the plan to the next stage within a year.”5
If there’s another attempt, it can only happen from December 2026.
Malaysia’s law prohibits GENM from making another attempt within 12 months from the date the offer failed (1 December 2025).
Interesting. Might be worth shortlisting for further research. What should we focus on in the full thesis?
Model GENNY’s revenue and capex until it becomes fully operational in 2031.
Will it generate enough cash to complete its capex? How much more debt will GENM need to take on?
We already know how many tables and slots they have opened, what’s their target over the next few years. Thanks to regulatory data, we also know the drop and gross gaming revenue (GGR) per table every week.6
Shouldn’t be too difficult.
Also, my preliminary research suggests little concern from the Empire Resorts acquisition and RAV Bahamas litigation. But I’ll finish my work on this and update you in the full thesis.
Great. Go do that.
Coming up next
“Accounting is useless. Backward-looking”
That’s the sentiment among many investors.
But my regular readers know that we can glean forward-looking information from public accounting data.
Example: Consensus expects Bumble (BMBL 0.00%↑ US)’s revenue to return to growth by 2028. This contradicts management’s own expectations. The accounting footnote on goodwill impairment revealed that management expects 0% terminal growth.
What other forward-looking insights can we glean from the accounting footnotes?
That’s what I will explore in my next analysis.
Subscribe for free to be notified immediately when I publish.
Subscribe for 2 to 3 analyses of global SMID equities every week.
Discover overlooked ideas and rethink familiar names.
Published by Andrew Wong, ACA, CFA
Disclaimer
This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.
I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.
I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.
At the time of publication, I do not hold any positions in GENM MK, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.