Genting Singapore - Maybank Kim Eng 2021-06-02: Ganbatte GENS

GENTING SINGAPORE LIMITED (SGX:G13)

Genting Singapore - Ganbatte GENS-Sega Sammy JV

We believe that the Genting Singapore-Sega Sammy JV will win the Yokohama IR RFP process. If Genting Singapore owns 50% of the JV, we estimate that a Yokohama IR will add S$1.8b to earnings and S$0.30 per share to our target price for Genting Singapore. Adding the latter to our DCF-based target price, we raise our target price for Genting Singapore to S$1.16 from S$0.86 and upgrade Genting Singapore to BUY.

There is a risk an anti-IR Yokohama mayor may be elected on 29 Aug 2021 but Genting Singapore (SGX:G13) is a tactical BUY as we believe no value from a Yokohama IR has been imputed into its share price currently.

On Monday, Yokohama announced that two groups qualified for its IR RFP process. NHK reported that the two groups are
- a Genting Singapore-Sega Sammy (6460 JP) JV (which we did not expect) and
- Melco Resorts & Entertainment (MLCO US).
On contractors,
- Genting Singapore-Sega Sammy JV named Kajima Corporation (1812 JP) while
- Melco named Taisei Corporation (1801 JP).
Recall that Kajima was the main contractor that constructed Genting Singapore’s Resorts World Sentosa.

In our view, Genting Singapore scores better in promoting the winner of its IR RFP process in the summer (Jun to Aug) of this year.
On another note, Sega Sammy stated that it would prefer a Genting Singapore-Sega Sammy JV.

Yin Shao Yang Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-06-02

SGX Stock Analyst Report BUY UPGRADE HOLD 1.16 UP 0.860