Genting Singapore - RHB Invest 2020-02-13: Pessimistic On 1H20 Outlook; Still NEUTRAL

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

Genting Singapore - Pessimistic On 1H20 Outlook; Still NEUTRAL

  • Genting Singapore (SGX:G13)’s 4Q19 results are in line. For the full year, it recorded an adjusted EBITDA of SGD1.2bn and PATMI of SGD689m, which made up 102% of our FY19 estimates.
  • In view of the novel coronavirus outbreak, we expect the tourism sector to take a hit in 1H20. We cut FY20F adjusted EBITDA by 11%, which in turn lowers our target price.



4Q19 results supported by positive luck factor.

  • Genting Singapore's 4Q19 gaming revenue grew 7.5% q-o-q but was down 12.8% y-o-y. We note that this was held up by the positive luck factor, as the VIP win rate increased to 3.4% from 2.7% in 3Q19. See Genting Singapore Announcements.
  • Both VIP and mass gaming volumes were on a declining trend due to the increase in casino tax levy and management’s strategy of tightening credits towards VIPs.


Pessimistic on 1H20 outlook.

  • Aside from a normalising win rate, we expect 1H20 earnings to take a hit as the novel coronavirus outbreak disrupts the tourism industry in Singapore.
  • Singapore has imposed an entry ban on all Chinese visitors and foreigners with a recent travel history to China. This is likely to impact the bulk of Genting Singapore gamers. On top of that, about 20% of visitors that visit Genting Singapore’s attractions are also from Mainland China. Travellers from other countries are also likely to avoid Singapore, given that it has the highest number of novel coronavirus cases outside of China. MICE activities at hotels are expected to decline.
  • Currently, we assume the travel ban to last for a quarter, and cut our FY20F EBITDA by 11% and PATMI by 14%.


Strong dividend yield and potential catalyst to support share price.






Juliana Cai RHB Securities Research | https://www.rhbinvest.com.sg/ 2020-02-13
SGX Stock Analyst Report NEUTRAL MAINTAIN NEUTRAL 0.85 DOWN 0.970



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