Genting Singapore - Maybank Kim Eng 2020-02-13: There Will Be A Spring After This Winter

GENTING SINGAPORE LIMITED (SGX:G13) | SGinvestors.io GENTING SINGAPORE LIMITED (SGX:G13)

Genting Singapore - There Will Be A Spring After This Winter


Upgrade to BUY – Maintain SGD0.99 EV/EBITDA-based TP

  • Genting Singapore (SGX:G13)'s 4Q19 earnings/dividends were within/above our expectations. The Covid-19 outbreak will have a negative impact on earnings but we expect it to be short lived.
  • We cut our FY20 EPS by 12% but leave our FY21 EPS little changed and raise our DPS estimate to 4.0cents p.a. At near trough valuations coupled with > 4.5% dividend yield p.a., we gather that downside risk to share price is limited.
  • The 2020 Budget and award of Japanese integrated resort licenses may also be potential catalysts.



Earnings in-line but dividends pleasantly surprised

  • Genting Singapore's 4Q19 core net profit of SGD176m (+16% y-o-y, +13% q-o-q) brought 2019 core net profit to SGD705.1m (-8% y-o-y), which was within our expectation at 102% of our FY estimate. See Genting Singapore Announcements.
  • 2019 EBITDA of SGD1.2b (-3% y-o-y) was also in-line with our expectations at 100% of our FY estimate. That said, the final DPS of 2.5cents brought 2019 total DPS to 4.0cents which was 0.5cent more than we expected.
  • As per management guidance, we raise our annual DPS estimates to 4.0cents from 3.5cents. See Genting Singapore Dividend History.


Cut FY20 EPS by 12%; long term EPS little changed

  • We expect 1Q20 to be poor due to the Covid-19 outbreak which caused:
    1. Singapore to bar Chinese visitors from 1 Feb 2020; and
    2. fewer locals to visit RWS.
  • We cut our FY20 EPS estimate by 12% as we cut our FY20 VIP and mass market GGR growth y-o-y by 9-10ppts but our FY21 EPS estimate is little changed (see Fig11 in attached PDF report).
  • As new Covid-19 deaths and cases are subsiding (Fig15-16), we believe the negative impact to RWS will not last beyond 2Q20. We also introduce FY22 EPS (+2% y-o-y).


Catalysts ahead with little downside to valuations






Yin Shao Yang Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2020-02-13
SGX Stock Analyst Report BUY UPGRADE HOLD 0.990 SAME 0.990



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