Nomura analysts have maintained their “Buy” rating on Genting Singapore stocks, predicting strong growth across all gaming segments for the remainder of 2023 following publication this week of its Singapore rival Marina Bay Sands’ (MBS) Q2 earnings results.
After MBS reported net revenues of US$925 million and Adjusted EBITDA of US$432 million, Nomura’s Tushar Mohata and Alpa Aggarwal said the results offer a “positive read-across to Genting Singapore” with its Singapore IR, Resorts World Sentosa, now tipped to achieve a 39% increase in rolling chip volume for FY23, while mass table drop and slot handle are expected to each grow by 10%.
“Note that for Genting Singapore, gross gaming revenue is already back to 90%+ of pre-COVID run rates due to its faster mass recovery, and we think this is also offsetting the ‘leakage’ of Singapore gaming revenue to Macau as Singapore outbound travel to Macau has also risen since the start of the year, suggesting some VIP GGR has shifted from Singapore to Macau,” they wrote.
“While slower than expected, Chinese travel recovery should continue for the rest of the year, helping Genting Singapore’s earnings in coming quarters.
“Visitors from Greater China to Singapore increased in June 2023 (from 148,000 in May to 167,000) and formed ~44% of 2019 monthly averages, while other regions staged a substantial recovery.”
The analysts said they maintain their “Buy” rating for Genting Singapore, describing a fall in share price following the company’s surprisingly subdued Q1 results announcement earlier this year as “overdone”.
Nomura has set a target price of SG$1.25 per share, representing 32% upside to Genting Singapore’s current price of SG$0.95.
