At least two research houses have upgraded their rating on Resorts World Bhd (4715), the casino operator that reported a fourth-quarter loss on Wednesday.
JPMorgan raised the stock to "overweight" from "neutral", saying the company's casino will benefit as Malaysians reduce overseas travel in the current recession.
OSK Research also upgraded it to a "trading buy" but maintained its target price of RM2.50.
The shares fell two sen or 0.9 per cent to a three-week low of RM2.22, a day after the company reported a fourth-quarter loss of RM387.8 million compared with a net profit of RM344 million in the same quarter a year ago.
This was mainly due to a RM781.5 million impairment loss that reflected a big drop in the market value of Star Cruises Ltd, in which it has a 19.6 per cent stake.
If not for the impairment loss, its net profit would have increased by 14 per cent as its underlying leisure and hospitality business remained strong.
Citigroup, which kept its buy/low-risk call on Resorts, said the results were boosted by higher casino patronage, better luck factor in the premium player business and higher volume of business recorded.
Credit Suisse, however, held on to its "underperform" rating on Resorts on expectations of a 5 per cent drop in leisure revenues this year due to "normalised luck" and weaker economic conditions.
It expects the first quarter, however, to be good as it encompasses the Chinese New Year, which is a typically strong season for Resorts.
The foreign research house cut its target price to RM1.65 from RM1.80 before.
Analysts, in their reports yesterday, said they remained wary of potential future related-party transactions that could take place.
This, they said, may not not sit well with investors of Resorts, which has a 33 per cent foreign shareholding.
They noted that a controversial related-party transaction announced in late November - in which Resorts bought a 10 per cent stake in US gaming patent company Walker Digital Gaming (WDG) for US$69 million (RM253 million) - had a negative impact on Resorts' shares. The deal was completed by mid-December as it didn't require shareholder of regulatory approval.
(Tan Sri Lim Kok Thay, a major shareholder of Genting Bhd which in turn owns Resorts, was also a director in WDG.)
Analysts noted that there is an outstanding option for Resorts to acquire a lottery patent company, Walker Digital Lottery, from the Lim family for US$27 million (RM99 million) within 18 months of the first transaction
JPMorgan raised the stock to "overweight" from "neutral", saying the company's casino will benefit as Malaysians reduce overseas travel in the current recession.
OSK Research also upgraded it to a "trading buy" but maintained its target price of RM2.50.
The shares fell two sen or 0.9 per cent to a three-week low of RM2.22, a day after the company reported a fourth-quarter loss of RM387.8 million compared with a net profit of RM344 million in the same quarter a year ago.
This was mainly due to a RM781.5 million impairment loss that reflected a big drop in the market value of Star Cruises Ltd, in which it has a 19.6 per cent stake.
If not for the impairment loss, its net profit would have increased by 14 per cent as its underlying leisure and hospitality business remained strong.
Citigroup, which kept its buy/low-risk call on Resorts, said the results were boosted by higher casino patronage, better luck factor in the premium player business and higher volume of business recorded.
Credit Suisse, however, held on to its "underperform" rating on Resorts on expectations of a 5 per cent drop in leisure revenues this year due to "normalised luck" and weaker economic conditions.
It expects the first quarter, however, to be good as it encompasses the Chinese New Year, which is a typically strong season for Resorts.
The foreign research house cut its target price to RM1.65 from RM1.80 before.
Analysts, in their reports yesterday, said they remained wary of potential future related-party transactions that could take place.
This, they said, may not not sit well with investors of Resorts, which has a 33 per cent foreign shareholding.
They noted that a controversial related-party transaction announced in late November - in which Resorts bought a 10 per cent stake in US gaming patent company Walker Digital Gaming (WDG) for US$69 million (RM253 million) - had a negative impact on Resorts' shares. The deal was completed by mid-December as it didn't require shareholder of regulatory approval.
(Tan Sri Lim Kok Thay, a major shareholder of Genting Bhd which in turn owns Resorts, was also a director in WDG.)
Analysts noted that there is an outstanding option for Resorts to acquire a lottery patent company, Walker Digital Lottery, from the Lim family for US$27 million (RM99 million) within 18 months of the first transaction
