Highlights

Simons Trading Research

Author: simonsg   |   Latest post: Tue, 13 Dec 2022, 10:52 AM

 

Genting Singapore - Brighter Days Ahead; Stay BUY

Author:   |    Publish date:


  • Genting Singapore’s 1Q22 earnings missed our and Street’s expectations mainly due to higher-than-expected costs, while revenue was in line. We believe subsequent quarters will continue to improve on Singapore’s border reopening.
  • We trimmed FY22F earnings forecast for Genting Singapore by 8% to factor in higher costs. We continue to like Genting Singapore for its strong recovery in FY22 and 4% FY23 yield.
  • Keep BUY rating on Genting Singapore with S$0.95 target price, 23% upside, ~3% FY22 yield.

Genting Singapore - 1Q22 Results Highlights

  • Genting Singapore (SGX:G13)'s 1Q22 missed both our and Street’s expectations. 1Q22 adjusted EBITDA made up 19% of our estimates and 18% of Street’s, while core net profit made up 13% and 12% respectively. The deviation was mainly due to lower-than-expected margins, as revenue met our expectations at 21% of our full-year estimate. No dividends were declared, as expected.
  • Despite the Omicron variant’s spread in 1Q22, gaming revenue improved 8% y-o-y and 42% q-o-q, while non-gaming revenue (NGR) rose 26% y-o-y. NGR softened 16% q-o-q against a seasonally stronger 4Q, where the holiday season tends to draw more visitors to Genting Singapore’s non-gaming attractions.
  • Adjusted EBITDA dipped 2.5% y-o-y on higher utility expenses and the expiry of COVID-19-related government grants. Adjusted EBITDA jumped 80% q-o-q mainly on gaming revenue recovery, which lifted adjusted EBITDA margin by 13ppts q-o-q to 40%.

Genting Singapore - Outlook

  • While management has pointed out that “limited flight schedules” and “ongoing travel restrictions on visitors from certain countries” may moderate the pace of recovery in leisure travel, we believe that these limitations and restrictions will continue to ease as the world transitions into endemicity.
  • Moreover, Singapore’s reopening of borders to vaccinated travellers will continue to drive Genting Singapore’s recovery. Despite 1Q22’s softer margins, we believe its EBITDA margin will recover in tandem with its revenue, given its operating leverage.

Genting Singapore - Earnings and Forecasts

  • Post results, we trimmed risks:
    • Re-closure of international borders, which would likely reduce footfall,
    • negative luck factor and regulatory risks, which could impact gaming revenues, and
    • China’s strict clampdown on illegal gambling and capital outflows having a dampening effect on Genting Singapore.

Source: RHB Invest Research - 20 May 2022

Share this
Labels: Genting Sing

Related Stocks

Chart Stock Name Last Change Volume 
Genting Sing 1.09 +0.01 (0.93%) 23,805,200 

  Be the first to like this.
 


APPS
I3 Messenger
Individual or Group chat with anyone on I3investor
 
 

211  171  218  765 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 Sembcorp Marine 0.107+0.003 
 HSI 18400MBeP.. 0.041-0.002 
 HSI 21800MBeC.. 0.059-0.003 
 HSI 18200MBeP.. 0.071-0.001 
 HSI 21000MBeC.. 0.089-0.003 
 Genting Sing 1.09+0.01 
 HSI 19400MBeP.. 0.081-0.003 
 HSI 17000MBeP.. 0.0670.00 
 HSI 22600MBeC.. 0.036-0.002 
 HSI 22200MBeC.. 0.061-0.009 
PARTNERS & BROKERS