...Rising competitive and regulatory headwinds alongside GENT's outsized expansion ambitions offset the company's ample cash flows. At the holding company level, Genting Bhd. (GENT) derives over two-thirds of its annual cash flows from the management fees, brand licensing fees, and dividends it receives from Genting Malaysia (GENM) and other subsidiaries. These subsidiaries' stable operations and strong competitive positions underpin GENT's resilient cash flows. While GENM is the largest cash contributor to date, the Malaysian government's decision to significantly raise gaming taxes in the country from 2019 in our view may likely reduce GENM's absolute dividend payout in future years, with Genting Singapore (GENS) becoming the group's top cash contributor. While the reduction from GENM's dividend may likely be material, GENT's overall cash inflows should be sufficient to cover its debt service. Nevertheless, the competitive landscape in the South-east Asian gaming industry is intensifying....
