Singapore’s gross gaming revenue is tipped to reach US$5.2 billion in 2024, exceeding its 2018 peak of US$4.6 billion on the return of Chinese tourists, according to investment bank Morgan Stanley.
The positive outlook former part of a recent note in which analysts Praveen Choudhary and Gareth Leung upgraded the stocks of Genting Singapore – operator of Resorts World Sentosa (RWS) – to “Overweight” and changed its target price from SG$0.85 to SG$1.15.
Anticipating a 10% quarter-on-quarter increase in Genting Singapore’s 4Q22 EBITDA to SG$278 million (US$212 million), Choudhary and Leung said, “Singapore might see structurally higher market size post-COVID compared to pre-COVID because of excess cash/liquidity/money parked by affluent Asians in Singapore.
“Genting Singapore’s 3Q22 GGR was already at 80% of the pre-COVID level, and we expect the benefits of Chinese tourists coming back to Singapore could become visible in 1Q23 and 2Q23. Earnings revisions are positive.”
Morgan Stanley said it expects Singapore GGR, comprising gaming revenues from its two integrated resorts in RWS and Marina Bay Sands (MBS), to reach US$4.4 billion in 2023 before exceeding its 2018 peak next year. The investment bank’s estimates for 2023 and 2024 are 9% and 11% above consensus respectively.
It also noted that Q4 EBITDA estimate implies annualized EBITDA of US$1.1 billion, around 90% of 2018 levels.
The upgrade to RWS stocks comes after MBS last week reported an all-time record in mass gaming revenues in 4Q22.
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