• Genting Singapore’s 3Q21 results came in below our expectation as EBITDA fell 30% q-o-q due to lower revenue generation, however it still outperformed rival MBS (EBITDA -86% q-o-q).
• Nevertheless, Genting Singapore remains a compelling economic reopening beneficiary as the COVID-19 pandemic eases, and could eventually look to enhance its capital management following the recent scrapping of its Yokohama IR bid.

Genting Singapore Reported Lacklustre 3Q21 Results…

• Genting Singapore (GENS, SGX:G13)’s (GENS) 3Q21 results revealed that Resort World Sentosa’s (RWS) gaming revenue decreased significantly (-13.9% q-o-q) from 2Q21, but still outperformed rival Marina Bay Sands’ (MBS) q-o-q gaming revenue decline of 35%. Genting Singapore also reported adjusted EBITDA of S$102m (-31% y-o-y; -31% q-o-q) in 3Q21. 9M21 EBITDA represents only about 69% of our full-year forecasts.
• …as the nation returns to Phase 2 Circuit Breaker. Genting Singapore’s 3Q21 decline in gaming revenue and weaker EBITDA reflected reduced operating capacity (two players per gaming table, alternate slots and electronic table games machines) in the quarter. Nevertheless, steady support by local patronage allowed Genting Singapore to deliver a profit despite the absence of international footfall without meaningful border relaxation.

A Compelling Economic Reopening Beneficiary

• Despite an uninspiring positive would be Genting Singapore significantly improving its capital management as it had made a capex commitment of up to US$10b for this project.

Valuation & Recommendation for Genting Singapore

• We cut our 2021 net tax EBITDA is sufficient to fund a final dividend of S$0.02 (2.4% 2021F yield). We project 2021’s net cash to be S$3.2b, or 32% of the current market cap.

Source: UOB Kay Hian Research - 10 Nov 2021