Analysts Split on Outlook for Parent and Subsidiary GenM
Come the holiday season in the second half of the year (2H25), Klang Valley residents view Genting Highlands as a desirable destination, yet its parent company, Genting Bhd, and its subsidiary, Genting Malaysia Bhd (GenM), face a divided outlook among financial analysts.
The hill resort, situated a mere 50km from Kuala Lumpur, offers a quick and convenient getaway for urban residents who prefer not to drive long distances.
While it once provided a tranquil reprieve from city congestion, the sheer volume of holiday traffic now often creates heavy congestion, with vehicle slowdowns starting right after the Gombak toll on the Karak Highway.
Despite this drawback, the combination of restaurants, cafes, theme parks, premium outlets, cooler temperatures, and, critically, the casinos, ensures the resort’s status as a perennially popular holiday destination.
Genting Bhd and GenM certainly deserve recognition for their continuous efforts to refurbish and refresh the retreat.
However, the fact that the destination continues to draw visitors has not translated into a consensus on the stocks.
The diverging view is stark: most experts rate GenM as a “hold” but recommend “buy” for its parent company, Genting Bhd, even though GenM reported better second-quarter (2Q25) results.
This difference in recommendation largely stems from Genting Bhd’s broader exposure to multiple industries, which provides it with a necessary buffer against sector-specific market volatility.
GenM’s Long-Term Bets and Complex US Strategy
The “hold” rating often assigned to GenM by analysts is attributed to the company’s involvement in major long-term investments that are expected to require a longer gestation period before providing a tangible return on investment (ROI).
Vincent Lau, head of equity sales and analyst at Rakuten Trade, explains that GenM’s potential returns are highly contingent on these large-scale, ongoing investments.
One of the most significant of these is its current bid for one of New York’s highly coveted full casino licenses, which would allow it to expand its existing operations at Resorts World New York City (RWNYC).
If this full license is successfully granted—a decision anticipated by December—RWNYC is slated to expand into a massive US$5.5 billion integrated resort.
Furthermore, GenM announced in May its plan to acquire full control of Empire Resorts, which owns Resorts World Catskills (RWC) along with other New York assets.
Lau notes that this uncertainty and the long timeframe for returns are precisely why many analysts label GenM as a “hold” or “market perform,” compounded by the fact that 2Q25 dividends were not paid.
Hong Leong Investment Bank (HLIB) Research echoes this caution, anticipating ongoing operational challenges and uncertainties emanating from GenM’s UK and US business segments, including Empire Resorts.
These external factors introduce potential downside risks to the recovery momentum of its core Malaysian operations, making the stock less compelling for immediate investment than its diversified parent company.
Value-Accretive Measures and Parent Company Diversification
Despite the noted challenges and the subdued “hold” rating, GenM is proactively taking value-accretive steps to strengthen its financial profile, while its parent, Genting Bhd, benefits from significant diversification across global industries.
HLIB Research views GenM’s recent proposals, announced in mid-August, in a positive light.
These proposals include the subsidiary Empire Resorts Inc selling its non-gaming assets, such as the RWC hotel.
This strategic move clearly highlights GenM’s focused efforts to pursue measures aimed at strengthening its earnings profile and improving its balance sheet health.
Maybank Investment Bank Research further details that Empire Resort’s plans involve liquidating non-gaming assets, acquiring land, reducing debt, and implementing expense cuts.
GenM aims to finalize this proposal by year-end, and if successful, Maybank IB estimates it could increase GenM’s financial year 2026 (FY26) earnings by a notable 24% and raise the target price by 30 sen to RM1.95.
Meanwhile, the parent company, Genting Bhd, offers an inherently more resilient investment proposition due to its exposure across diverse sectors, including a 20.3% stake in Singapore’s TauRx Pharmaceuticals Ltd.
This pharmaceutical interest holds significant potential, as TauRx is currently awaiting FDA approval for its Alzheimer’s treatment, hydromethylthionine mesylate.
While Genting and GenM share leadership, their profiles diverge: GenM focuses exclusively on leisure and hospitality, whereas Genting Bhd operates across multiple sectors, providing a crucial diversification benefit that makes it the preferred “buy” pick for analysts.
Contrasting Risks and Long-Term Potential
The distinct profiles of Genting Bhd and GenM translate into contrasting risk exposure, with the subsidiary facing higher vulnerability to sector-specific regulatory and competitive pressures.
An analyst from a foreign research firm points out that Genting Bhd offers clear diversification benefits as it is less dependent solely on Resorts World Genting (RWG) compared to its subsidiary, GenM.
The performance of Genting’s Singapore unit (Genting Singapore, listed separately) remains a key driver for the parent company, backed by robust international tourism inflows.
The parent company’s prospects are further supported by tourism growth in Malaysia and Singapore, the potential New York licensing opportunity, and stable earnings from its oil and gas segment.
Conversely, GenM, being narrowly focused on gaming and leisure, depends heavily on visitor traffic at RWG.
While domestic demand for RWG is strong, aided by improved connectivity and events-based tourism, the property is approaching a mature growth phase, lacking major new attractions post-Genting Integrated Tourism Plan.
This makes GenM’s earnings more vulnerable to potential changes in Malaysian gaming tax policy.
Additional risk factors for the gaming giant include cost inflation, intense competition in US gaming markets, and a slower-than-expected recovery in UK operations.
The analyst concludes that in the current market, preference is tilted toward Genting Bhd for its financial resilience.
However, GenM could outperform if the global tourism momentum accelerates significantly and its crucial US expansion plans successfully materialize.
