KUALA LUMPUR: CIMB Equities Research has upgraded Genting Malaysia (GENM) from Neutral to Outperform.
It said on Tuesday Genting Malaysia is among the cheapest gaming stocks in the region despite being a monopoly because of its perceived ex-growth and regulatory risk profile.
"However, we believe its next capex cycle will reverse this perception and drive a multi-year re-rating. We upgrade Genting Malaysia (GENM) from Neutral to Outperform," it said.
CIMB Research cut its FY13-14 EPS forecasts by 6-7 per cent, factoring in minimum wages and business disruptions as Resorts World Genting (RWG) undergoes an overhaul.
"However, we increase our FY15 EPS by 16 per cent on expectations of new gaming capacity. Our RNAV target price is raised as we lift RWG's 2014 EV/EBITDA from 8 times to 10 times, in line with its past valuation average during the last capex expansion," it said.