Solid improvement across both the mass gaming tables and slot machine segments during the June 2023 quarter has Genting Singapore’s mass market GGR on track to surpass pre-COVID levels this year, according to Maybank analyst Samuel Yin Shao Yang.
In a Monday note following a meeting with Genting Singapore management, Yang said that all major operating metrics at the company’s Singapore integrated resort, Resorts World Sentosa, had shown sequential improvement in Q2, including “high-margin slot machine” which “continues to grow, driven by locals.”
As such, the analyst is comfortable in forecasting mass market GGR to reach 105% of 2019 levels in FY23, climbing to 120% in 2024 as more Chinese play returns.
Yang does, however, anticipate slower profitability in the short-term, with Genting Singapore in the process of increasing its headcount and preparing to spend more to lure back Chinese tourists.
This sees Maybank cut its core net profit forecast by 12% and EBITDA forecast by 14% for 2023, and by 6% and 9% respectively for 2024.
“Notwithstanding our lower EBITDA forecasts, we still expect FY2E EBITDA to return to FY19 levels by then,” Yang wrote.
“This is more meaningful when we consider that gaming tax rates will effectively be 5% higher by then.”
While Genting Singapore continues to ride the Singapore gaming wave, Yang revealed that the company will not be returning to the Japanese market anytime soon and “will not make a second bid for a Japanese IR license.”
The company was widely believed to be the frontrunner to win an IR license in Yokohama and had invested heavily into its bid, only for the city to withdraw from the process when anti-IR campaigner Takeharu Yamanaka won the mayoral election in August 2021.
Yang added that it is “too early to tell” if Genting Singapore will bid for a license in Thailand should the government decide to make legalized casino gaming a reality in the near future.
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