GENS' huge net cash position creates meaningful opportunities to unlock shareholder value. Although the upcoming waterfront development will require sizeable capex, DBS' scenario analysis indicates the company has headroom to pay out over $1 billion in cash while maintaining modest debt borrowings.
"In our view, a material capital return plan be it through equal access offer or special dividend could excite the market, and act as a catalyst to improve valuations and unlock value for shareholders," says Chee.
Hence, Chee has raised FY2026 adjusted Ebitda by 1%, driven by a more constructive gaming environment and partly offset by weaker room rates.
"We were initially cautious amid global uncertainties, but Las Vegas Sands’ positive outlook for Marina Bay Sands gives us greater confidence that gaming volume momentum can extend into 2026. With most recently renovated assets now coming online and strong Chinese New Year activations, we believe the company is well positioned to defend, and potentially expand, market share in 1Q2026," says Chee.
See also: DBS maintains 'buy' and 45 cents target price on OUE REIT following Salesforce Tower deal
This should be further supported by the doubling of China flights ahead of the CNY travel surge, which he believes could translate into a meaningful uplift in gaming volumes at RWS. Accordingly, he has pencilled in higher gaming contribution, partially offset by softer room profitability, as The Laurus’ basic suite rates have fallen to as low as
$630/night, from above $1,000/night in October 2025.
Chee still sees scopr for a rerating as GENS unlocks value from its substantial cash reserves and improves its return on capital (ROC), which Chee points out is a key metric that correlates to valuation. He also notes that downside risks appear laregly cushioned thanks to the counter's attractive dividend yield of about 5.3% at 75 cents.
As at 11.05am, shares in GENS are trading at 80 cents.
