GENTING SINGAPORE LIMITED (SGX:G13)
Genting Singapore - Looking Forward To Borders Reopening
- 3Q21 hurt by tightened COVID-19 measures.
- Impact of VTLs in 4Q21 likely to be limited.
- Beneficiary of borders reopening.
Genting Singapore's 3Q21 adjusted EBITDA missed expectations
- Genting Singapore (SGX:G13) reported its 3Q21 business update which came in below our expectations.
- Genting Singapore’s revenue and adjusted EBTIDA dropped 16% y-o-y and 31% y-o-y to S$251.5m and S$102.5m, respectively, weighed down by lower gaming (-9% y-o-y) and non-gaming revenue (-6% y-o-y) due to tightened COVID-19 restrictions in Singapore during the quarter. Net profit, however, improved 11% y-o-y to S$60.7m.
Non-gaming revenue improved 29% while gaming revenue fell 14% q-o-q
- On a q-o-q basis, revenue and adjusted EBITDA fell 9% and 31% q-o-q respectively, largely attributable to a 14% decline in gaming revenue in 3Q21 due to tighter safe distancing measures.
- On the other hand, non-gaming revenue improved 29% q-o-q due to several events during the quarter such as the musical sensations at the S.E.A. Aquarium and Halloween season.
4Q21 is likely to remain soft, but better recovery in FY22
- Singapore recently announced the extension of dining-in capacity and expansion of Vaccinated Travel Lanes (VTLs) to Malaysia ahead of the end of the Stabilisation Phase on 21 Nov 2021 as the COVID-19 situation has stabilised. Singapore is also in discussion with other ASEAN countries to reconnect. As Singapore moves towards the “living with the endemic” approach, we expect to see further calibrated steps towards reopening which will aid the recovery of Genting Singapore in FY22.
- However, we expect the impact of VTLs on Genting Singapore to be limited in 4Q21 as the countries on the list are from GENS’s non-traditional markets. Note that VTL with Malaysia (one of GENS’s traditional source markets) will only start from 28 Nov 2021.
- After adjustment, we maintain our fair value estimate for Genting Singapore at S$0.94.
- See
Genting Singapore - ESG Updates
- Genting Singapore lags its global peers on governance. Genting Singapore has related party transactions with the controlling shareholder, Genting Overseas Holdings Limited (52.8% votes held).
- Genting Singapore demonstrates initiatives to mitigate the effects of problem gambling such as advertisements, self-exclusion and voluntary visit limit options. However, unlike better-performing peers, there is no evidence of play safe limits such as voluntary money and time limit settings.
Chu Peng
OCBC Investment Research
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https://www.iocbc.com/
2021-11-10
SGX Stock
Analyst Report
0.94
SAME
0.94
