The return of Chinese visitation, impact of Chinese New Year and flowthrough from recent large-scale concerts in the Lion City bode well for Genting Singapore’s impending 1Q24 results, with the March quarter likely to be “seasonally strong” according to Nomura analysts.
In a Thursday note following the release of the Q1 financial results of duopoly rival Marina Bay Sands, Nomura’s Tushar Mohata and Alpa Aggarwal said a quarter-on-quarter increase in volumes at MBS provide a positive read-across for Genting Singapore’s Resorts World Sentosa – primarily due to strong visitor arrivals to Singapore in the quarter.
MBS saw VIP volumes grow 13% sequentially to US$8.2 billion in Q1, while mass drop was up 14%.
“We think the increase in volumes reflects the increased visitor arrivals to Singapore – with the increase largely from Greater China tourists – in 1Q24 due to Chinese New Year, concerts held in Singapore and the mutual visa exemption between Singapore and China travellers implemented in February,” Nomura wrote.
“Barring volatility in VIP hold rate, which is unfeasible to predict, we expect 1Q24 to be seasonally strong for Genting Singapore due to strong visitor arrivals to Singapore in the quarter.”
Mohata and Aggarwal added that Genting Singapore’s 4Q23 results had been negatively affected impairments, which led to a decline in EBITDA quarter-on-quarter.
“We expect impairments to be much lower in 1Q24 vs 4Q23 and therefore help in sequential earnings uplift,” they said.
“The resumption of Singapore Airlines’ flights from 22 April to three Chinese cities – Chongqing, Chengdu and Xiamen – after a three-week suspension also eases concerns about its impact on visitation from China to Singapore.”
Nomura has maintained its “Buy” rating on Genting Singapore, adding it expects rolling chip volume at RWS to grow by 28% year-on-year in 2024, with mass table drop and slot handle to each grow by 5%.
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