Genting Singapore - Maybank Kim Eng 2022-01-27: Reassuring Vibes From Marina Bay Sands 4Q21 Results

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GENTING SINGAPORE LIMITED (SGX:G13)

Genting Singapore - Reassuring Vibes From Marina Bay Sands 4Q21 Results

• Las Vegas Sands (LVS US) reported 4Q21 results with Marina Bay Sands (MBS) generating better results q-o-q despite elevated numbers of new COVID-19 cases. While MBS’ results are not as good as those reported in 1Q21, 2Q21 and pre-COVID-19 times, we still welcome them as a good portent that Genting Singapore (SGX:G13)’s earnings troughed in 3Q21 (core net profit: S$26m) and ought to recover a tad in 4Q21. We maintain our earnings estimate and HOLD call on Genting Singapore.

MBS 4Q21 EBITDA of US$177m (adjusted: ~US$75m)

• Marina Bay Sands (MBS) generated 4Q21 EBITDA of US$177m (+23% y-o-y, +1,080% q-o-q). That said, the results were buoyed by a high VIP win rate of 6.3% and US$70m of bonus reversals and Jobs Support Scheme payments. Adjusting for them, 4Q21 EBITDA would have come in at ~US$75m which is still a marked improvement from 3Q21 EBITDA of US$15m.
• To be sure, it would still be lower than the 1Q21 and 2Q21 EBITDAs of US$144m and US$112m respectively.

4Q21 operating metrics recovered Q-o-q

• This is due to all 3 gaming volume parameters (VIP volume: +187% q-o-q, mass market table drop: +28% q-o-q, slot handle: +25% q-o-q) recovering q-o-q despite elevated numbers of new COVID-19 cases in Singapore in 4Q21.
• By extension, we hope Genting Singapore will report similar trends in its upcoming 4Q21 results on 17 Feb 2022. With the number of new COVID-19 cases in Singapore surging again, we hope that the 4Q21 operating metrics can be repeated in 1Q22.

MBS 2.0 to go ahead despite on-going pandemic

• Despite the on-going COVID-19 pandemic, LVS stated that MBS will go ahead with an US$1b renovation that will expand its room inventory (current: > 2,500) which will be over and above its S$4.5b ‘MBS 2.0’ reinvestment programme. In our view, this may compel Genting Singapore to do the same with its S$4.5b ‘RWS 2.0’ reinvestment programme despite the on-going COVID-2019 pandemic.
• See
  • Genting Singapore's Share Price,
  • Genting Singapore's Target Price,
  • Genting Singapore's Analyst Reports,
  • Genting Singapore's Dividend History,
  • Genting Singapore's Announcements,
  • Genting Singapore's Latest News.

Yin Shao Yang Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2022-01-28

SGX Stock Analyst Report HOLD MAINTAIN HOLD 0.830 SAME 0.830