Maintain HOLD and S$0.86 Target Price for Now

• The Japanese integrated resort (IR) liberalisation process is progressing at a rapid clip. Of greatest interest to us is the Yokohama IR Request For Proposal (RFP) process, which we opine Genting Singapore (SGX:G13) has a good chance of winning.
• We estimate that the Yokohama IR will generate US$2.7b in net profit per annum, and is worth US$5.4b (S$0.60/share), which translates into substantial earnings and valuation upside for Genting Singapore.
• Maintain earnings estimates, HOLD call and S$0.86 DCF-based target price for now.

Forecast Yokohama IR GGR of US$7.0b Per Annum

• We estimate that the Japanese IR industry total GGR will stand at US$11.7b per annum with Kanto (Yokohama)/Kansai (Osaka, Wakayama)/Kyushu (Nagasaki) region accounting for 60%/27%/13% share of total GGR.
• In relation to Yokohama IR GGR, we estimate that it will stand at US$7.0b per annum of which US$5.8b p.a. will be sourced from locals and US$1.2b per annum will be sourced from tourists.
• In terms of VIP: mass market GGR mix, we forecast it to come in at 17% : 83%. More details available in report attached below.

Genting Singapore in a Good Position to Win the Yokohama IR But Not Without Risks

• Our channel checks in Japan indicate to us that Genting Singapore is well positioned to win the anti-IR Yokohama mayor is elected on 22 Aug 2021.

Yokohama IR May Add Up to S$0.60 Per Share to Our Target Price

• We estimate that the Yokohama IR will generate US$2.7b in net 40%, the earnings and value accretion will still be a substantial S$1.4b, or the equivalent of S$0.24 per share.
• Continue to read the 30-page report attached below for complete analysis.

Source: Maybank Kim Eng Research - 19 May 2021