Genting Singapore - Maybank Kim Eng 2021-02-10: Could Not Emulate Marina Bay Sands’ Sterling 4Q20 Results

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

Genting Singapore - Could Not Emulate Marina Bay Sands’ Sterling 4Q20 Results


Downgrade to HOLD with lower target price of S$0.92 (-3%)

  • Genting Singapore (SGX:G13)'s 2H20/FY20 earnings and dividends outperformed our expectations. That said, the outperformance was largely due to non-recurring items.
  • Unfortunately, Resorts World Sentosa (RWS) could not emulate Marina Bay Sands’ (MBS) in growing gaming revenue in tandem with the lifting of operating capacity limits.
  • Our earnings estimates are little changed for now. We also trim our DCF-based target price by 3% to S$0.92 on minor housekeeping. With < 10% upside potential, we downgrade Genting Singapore to HOLD.



Earnings and dividends beat our expectations…

  • Genting Singapore's 2H20 core net profit of S$186.9m brought FY20 core net profit to S$123.6m, which was above our expectation of S$86.9m. Final dividend of S$0.01 was also above our expectations as we were not expecting any. That said, Genting Singapore's FY20 revenue of S$1.1b was within our expectations at 100% of our full year estimate.
  • The earnings outperformance was largely due to FY20 reversal of impairment on trade receivables of S$22.8m (MKE forecast: -S$68.7m) and reversal of bonuses which Genting Singapore did not quantify.


… but underlying operations could have been better

  • Resorts World Sentosa (RWS) was allowed to increase operating capacity from 25% to 50% from 18 Sep 2020 and admit all guests from 9 Oct 2020 (members only before) but 4Q20 gaming revenue was flat q-o-q. In contrast, Marina Bay Sands (MBS)’s 4Q20 gross gaming revenue (GGR) grew 12% q-o-q in USD terms. See previous report: Genting Singapore - Maybank Kim Eng 2021-01-28: Really Good Vibes From Marina Bay Sands' 4Q20 Results. This implies RWS ceded GGR share in 4Q20 (2H20: 46%).
  • RWS was allowed to increase operating capacity from 50% to 65% from 28 Dec 2020 but Genting Singapore still does not expect its GGR to improve markedly on lack of foreign gamblers.


EPS estimates relatively unchanged for now






Yin Shao Yang Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-02-10
SGX Stock Analyst Report HOLD DOWNGRADE BUY 0.92 DOWN 0.950



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