Genting Singapore - OCBC Investment 2020-02-14: Pleasant Surprise From Dividend

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

Genting Singapore - Pleasant Surprise From Dividend

  • 4Q19 remains weak, luck-adj. EBITDA -12% q-o-q.
  • Pleasant surprise from final dividend which implies ~4.5% annualised yield.
  • Undemanding valuation and sustainable dividend yield likely offer support to share price.



Muted 4Q; slightly higher dividends.

  • Genting Singapore (SGX:G13)’s EBITDA stayed largely flat q-o-q at SGD288mn on a reversing VIP hold rate (3.4% in 4Q vs 2.6% in 3Q). Adjusted for this, EBITDA fell 12% q-o-q to SGD260mn, versus Marina Bay Sands’ luck-adjusted EBITDA growth of +5% q-o-q in 4Q.
  • Market share loss was also noted across its business segments. The market share of VIP rolling chips volume fell 4ppt q-o-q to 43% in 4Q, while mass-market GGR fell 2ppt q-o-q to 35%. However, the weak 4Q results was offset by the surprise increase in its final dividend of SGD0.025/share (2017 & 2018: SGD0.02/share) despite the challenging outlook.
  • The management intends to maintain the dividend payout.


Potential recovery delayed to 2H20.

  • At the date of report, Singapore has reported 50 coronavirus cases. Although management expects a low probability of a complete casino shutdown, the significant drop in visitation is likely to hurt its Q1 performance.
  • We estimate that Chinese visitors contribute to about 30-40% of casinos’ revenue in Singapore, and it might take a few months for visitors to resume normal travel even if the outbreak stabilises. Accordingly, we expect the potential recovery to be delayed to 2H20.


Sluggish regional and market outlook.






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2020-02-14
SGX Stock Analyst Report BUY MAINTAIN BUY 1.00 DOWN 1.050



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