In a note today, the research house has upgraded its call on Genting Malaysia Bhd to “buy”, from “hold”, with a target price (TP) of RM2.71.

It said the group’s current valuation offers a superior return compared to its peers, in terms of dividend yield and financial year 2024 (FY2024) price-earnings (PE) ratio.

TA Securities’s top pick for the sector is Genting Bhd with a “buy” call and a TP of RM5.35, favouring the group’s diversified business model and relatively cheap valuation.

Genting, an investment holding company, is the single largest shareholder of Genting Malaysia with a cumulative 49.33% stake as at March 21.

Budget 2024 is expected to be tabled on Oct 13 this year.

On another note, TA Securities said there are no changes to the sector’s earnings.

“In our sensitivity analysis, every percentage point increase in gaming tax would lead to a 4.6% and 2.6% decline in Genting Malaysia and Genting’s FY2024 profit respectively,” it said.

Meanwhile, Sports Toto’s earnings would decline by roughly 7.5% for every percentage point increase in gaming tax without adjustments made to the prize payout.

“However, we reiterate our view that this is an unlikely scenario as the hike would derail the earnings recovery process,” the research house said.

As at 12.13pm, Genting Malaysia’s share price was up by three sen or 1.19% at RM2.56, giving it a market capitalisation of RM15.2 billion.

Its parent company Genting’s shares were unchanged at RM4.27, giving it a market capitalisation of RM16.55 billion.