Genting Singapore - RHB Invest 2020-05-15: Tough Times Ahead; TAKE PROFIT Now

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

Genting Singapore - Tough Times Ahead; TAKE PROFIT Now

  • Genting Singapore’s 1Q20 results are largely in line with our forecasts, with EBITDA plunging 55% y-o-y to SGD147m. See Genting Singapore Announcements. We see more downside risks at current Genting Singapore share price levels, as the recovery may not be as swift if the COVID-19 pandemic drags on. Management has extended its pessimistic outlook to the rest of FY20.
  • Downgrade to TAKE PROFIT from Buy, SGD0.64 Target Price, 12% downside with 5.5% FY20F yield.
  • Nevertheless, Genting Singapore’s strong balance sheet should enable it to tide through this difficult time. We recommend that investors buy on dips.





Harder times to come.

  • Genting Singapore (SGX:G13)'s 1Q20 results are in line, as we expect a poor set of FY20 numbers, in view of the pandemic. We expect 2Q20 numbers to be impacted further, as Genting Singapore halted almost all operations to comply with Singapore’s “circuit breaker” regulations.
  • Even though the “circuit breaker” is expected to end on 1 Jun, we believe restrictions will only be lifted in phases – and Genting Singapore’s operations may remain suspended in the near term.


Prolonged pandemic poses downside risks.

  • At current valuations, we see downside risks arising from a slower recovery in Genting Singapore’s performance, if the pandemic remains widespread and protracted. While the Government is in discussions with other countries on lifting travel restrictions with safeguards in place, we think that will take some time to implement as COVID-19 continues its global rampage.
  • Countries with declining COVID-19 cases will also need to be monitored, for any resurgence in cases after their lockdowns ease. As such, we believe short-term international travel for leisure could take a longer time to resume. Tourism may also not recover in a significant way, as travellers remain wary of potential infection.
  • See also previous report: Genting Singapore - RHB Invest 2020-03-20: Write-Off 2020, Look Forward To 2021.


We recommend that investors TAKE PROFIT






Juliana Cai RHB Securities Research | https://www.rhbinvest.com.sg/ 2020-05-15
SGX Stock Analyst Report TAKE PROFIT DOWNGRADE BUY 0.640 SAME 0.640



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