Genting Singapore - CGS-CIMB Research 2021-02-10: A Satisfactory Ending

GENTING SINGAPORE LIMITED (SGX:G13)

Genting Singapore - A Satisfactory Ending

Genting Singapore's FY20 adjusted EBITDA of S$427m beat our and consensus FY20F forecasts of S$354m and S$340.0m, respectively, on higher 4Q adjusted EBITDA margins.2H20 adjusted EBITDA margin was a stellar 58.5%, likely aided by some provision write-backs, in our view.
Final dividend of S$0.01/share was the only disappointment.
2H20’s results show Genting Singapore’s resilience. It is also still flush with cash. Reiterate ADD, with a higher target price based on 9.5x CY22F EV/EBITDA.

Genting Singapore (SGX:G13)'s 2H20 revenue of S$615.5m (-49% y-o-y) was a sequential improvement from 1H20’s S$448.2m, due to 4Q20 revenue (S$314.5m) that grew ~4.5% q-o-q on the back of higher non-gaming revenue as we think domestic school holidays and the inability to travel overseas spurred staycations and park visitation.
FY20F revenue of S$1.06bn (-57.1% y-o-y) was within our expectations. However, 2H20 adjusted EBITDA margin of ~58.5% (vs. 2H19: 47%/FY19: 48%) was a surprise.
Genting Singapore's 4Q20 adjusted EBITDA margin of above 60%, likely due to a combination of JSS support schemes and provision reversals (trade receivable impairments saw a write-back of S$22.8m in FY20), helped spur FY20F adjusted EBITDA of S$427m, ahead of both our and street’s forecast.
Final dividend of S$0.01/share was disappointing (FY19: S$0.04/share).

Genting Singapore's 2H20’s gaming revenue (post Phase-2 in Singapore) accounted for 57% of 2H19’s gaming revenue, which is encouraging considering the lack of tourists that were the main targets of both Singapore casinos previously.
We think the stronger revenue could also be due to Genting Singapore’s higher market share in 2H20 (VIP volume market share was 53%, while mass GGR market share was 44%).
We fine-tune our FY21-22F adjusted EBITDA and earnings per share forecasts due to slightly higher revenue and EBITDA growth and introduce our FY23F forecasts. We estimate FY21F/FY22F adjusted EBITDA could be ~66%/82% of FY19’s as tourism returns gradually over the next two years.

Genting Singapore has guided that construction on RWS 2.0 has been delayed, with design revisions to adapt to a post-pandemic environment.
For Japan, there has not been a formal Request-for-Proposals (RFPs) yet.

Genting Singapore’s further recovery relies on Singapore’s borders tough times.
We reiterate our ADD call and raise our 12-month target price to S$1.05, now based on 9.5x CY22F EV/EBITDA (close to FY12-20 mean), as we like its medium-term prospects and strong balance sheet.
See Genting Singapore Share Price; Genting Singapore Target Price; Genting Singapore Analyst Reports; Genting Singapore Dividend History; Genting Singapore Announcements; Genting Singapore Latest News.
Potential re-rating catalysts include a quicker recovery in Singapore’s tourism.
Downside risks are vice-versa.

Cezzane SEE CGS-CIMB Research | https://www.cgs-cimb.com 2021-02-10

SGX Stock Analyst Report ADD MAINTAIN ADD 1.05 UP 0.860