Genting Malaysia can expect to see an EBITDA turnaround starting from the fourth quarter of 2020, with all of its major casinos now open again and domestic tourism aiding the recovery of its flagship Malaysian IR Resorts World Genting.

According to a report on Malaysia equity strategy published by a team of Nomura research analysts on Thursday and examining the state of the Malaysian economy during COVID, Resorts World Genting is already showing strong signs of recovery – up to 40,000 visitors per day and with the 50% of hotel rooms open sitting at 90% average occupancy since reopening in June.

“We expect Resorts World Genting to stage a gradual recovery over the coming quarters, with a sharp inflection come FY22 with the opening of the theme park (official timeline is mid-2021, but prone to slippages),” Nomura’s report said.

However, the reopening of the company’s US casinos at Catskills and New York City, “combined with the good footfalls seen at the Malaysian casino since reopening in June due to low dependence on a foreign clientele, should result in a turnaround in EBITDA from the 4Q20 results season.”

Nomura noted that while fellow Genting Group subsidiaries like Genting Singapore, which rely far more heavily on inbound tourism, face a much longer recovery time, Genting Malaysia is performing well due to domestic tourism.

“While international inbound traffic is essentially negligible, domestic tourism seems to be filling the void, as Malaysians are vacationing within the country,” it says.

“A study of Google Search Trends in Malaysia shows that while airline search trends are still below pre-COVID-19 levels, searches for terms relevant for local tourism within Malaysia such as ‘hotel bookings’ and ‘Genting’ are almost back to pre-COVID-19 levels, whereas search trends for COVID -19 have declined, suggesting fading fear factor.”

Nomura has maintained its Buy rating for Genting Malaysia stock, which it says it prefers over Genting Berhad due to a better balance sheet and concerns over short-term ROIC for the latter’s Resorts World Las Vegas project.