GENTING SINGAPORE LIMITED (SGX:G13)
Genting Singapore - Slow Start To Fy21
Maintain HOLD call but trim target price by 7% to S$0.86
- Genting Singapore (SGX:G13)'s 1Q21 results came in below our expectations as Singapore’s borders remain largely closed. FY21 will be another challenging year as COVID-19 cases are resurgent in Resorts World Sentosa’s (RWS) key markets.
- We slash our FY21E/FY22E earnings by 59%/45% but leave our FY23E earnings little changed as we expect operations to have recovered by then. To date, ~25% of Singapore’ population has been vaccinated (c.15% fully vaccinated).
- Our DCF-based target price for Genting Singapore is trimmed to S$0.86 from S$0.92.
1Q21 earnings below our expectations
- Genting Singapore's 1Q21 core net profit of S$44.5m (-16% y-o-y, -61% q-o-q) accounted for only 11% of our FY estimate. As Singapore’s borders remain largely closed, the majority of RWS’ gamblers in 1Q21 were Singaporean citizens and permanent residents (SCPR) which we gather accounted for ~20%/c.60% of pre-COVID-19 industry VIP volume/mass market GGR. We had hoped that industry VIP volume/mass market GGR would recover to 50%/75% of pre-COVID-19 levels this year.
FY21 likely to be another quiet year…
- Unfortunately, it is increasingly unlikely given the third COVID-19 ‘wave’ in Malaysia. Recall that Malaysia is a key foreign market for RWS, especially its high margin mass market. Moreover, the Singaporean government announced on 4 May 2021 that the operating capacity of attractions, which includes integrated resorts like RWS, will be reduced from 65% to 50% due to a recent rise in COVID-19 cases in Singapore.
…. but long term earnings estimates little changed
- We now forecast industry VIP volume/mass market GGR to stand at 25%/60% of pre-COVID-19 levels in FY21E (50%/75% previously) and recover to 50%/80% of pre-COVID-19 levels in FY22E (75%/100% previously). We still expect industry VIP volume/mass market GGR to recover to 75%/100% of pre-COVID-19 levels in FY23E as vaccinations progress.
- Coupled with higher RWS market share and lower depreciation, we slash FY21E/FY22E earnings by 59%/45% but tweak our FY23E earnings up by 5%.
- See
Yin Shao Yang
Maybank Kim Eng Research
|
https://www.maybank-ke.com.sg/
2021-05-09
SGX Stock
Analyst Report
0.860
DOWN
0.92
