• Genting Singapore (GENS)’s 2Q18 adjusted EBITDA of S$266m (-9% y-o-y) was below expectations due to “bad luck” in the VIP business.
• However, on normalised VIP win rate, 2Q18 results would have been in line, rising 2-3% y-o-y.
• VIP rolling chip growth was strong, up 27% y-o-y, tracking above our initial estimates.

Rally Not Over

We maintain our BUY call on Genting Singapore (GENS) with a revised Target Price of S$1.55. 

While GENS’ share price has recovered marginally since its 1Q18 results as previous concerns over margin pressures subsided, we believe there remains significant potential for the share price to rally strongly. 

Besides growing earnings, it is attractively valued for an integrated resort (IR) operating in a duopoly market in Singapore and there is heightened interest of GENS potentially winning a bid to develop an IR in Japan casino over the next 1-2 years.

Source: DBS Research - 06 Aug 2018