GENTING SINGAPORE LIMITED (SGX:G13)
Genting Singapore - Not Every Day That It Outshines Marina Bay Sands
Maintain HOLD call with a tad higher target price of S$0.78
- Genting Singapore (SGX:G13)'s 3Q20 results surprised on the upside. We gather that the outperformance was due to local gamblers remaining in Singapore to gamble. Curiously, Resorts World Sentosa (RWS) generated more EBITDA than Marina Bay Sands (MBS) in nearly 10 years.
- We raise our Genting Singapore's FY20E EBITDA estimate by 425% but maintain our FY21E/FY22E EBITDA estimates. Consequently, our DCF-based Target Price is raised marginally to S$0.78 from S$0.76.
- With < 10% upside potential still, we maintain HOLD on Genting Singapore.
Genting Singapore's 3Q20 EBITDA positive surprise due to slot machine GGR?
- Genting Singapore's 3Q20 core net profit of S$73.2m brought 9M20 core net profit to S$9.9m which was above our expectations as we were forecasting a FY net loss. The outperformance was largely due to 9M20 net gaming revenue falling 60% y-o-y or 14ppts narrower than we expected.
- Gleaning insights from MBS’ 3Q20 results, we gather that high margin slot machine GGR (~20-25% of GGR) did not fall much y-o-y as local gamblers had to gamble in Singapore as they could not cross into Malaysia to do so.
Generated higher quarterly EBITDA than MBS
- Of note, Resorts World Sentosa (RWS) generated a higher quarterly EBITDA than Marina Bay Sands (MBS) for the first time since 1Q11.
- We raise our FY20E EBITDA estimate by 425% as we now forecast Genting Singapore's FY20E mass market (tables and slot machines) GGR to fall a narrower 50% y-o-y (70% previously). Our FY21E/FY22E EBITDA estimates are unchanged as they are based on mass market GGR recovering to 75%/100% of pre-COVID-19 levels which we still deem as reasonable.
Long term EBITDA estimates little changed though
- We also reduce our FY20E/FY21E/FY22E depreciation and amortisation estimates by 14% to be consistent with 6M20 results. Net impact of the above is that we now forecast Genting Singapore's FY20E net profit of S$86.9m (S$214.6m net loss previously) and raise FY21E/FY22E net profit forecasts by 12%/7%.
- As our long term EBITDA estimates are largely unchanged, we raise our DCF-based Target Price (WACC: 14.5%, g: 0%) marginally to S$0.78 from S$0.76.
- See Genting Singapore Share Price; Genting Singapore Target Price; Genting Singapore Analyst Reports; Genting Singapore Dividend History; Genting Singapore Announcements; Genting Singapore Latest News.
- With < 10% upside potential, maintain HOLD on Genting Singapore.
Yin Shao Yang
Maybank Kim Eng Research
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https://www.maybank-ke.com.sg/
2020-11-15
SGX Stock
Analyst Report
0.78
UP
0.760
