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.
DBS Group Research is upgrading its call on Genting Singapore (GENS) to "buy" from "hold" previously, while increasing its target price to 90 cents from 80 cents.
Analyst Chee Zheng Feng notes that GENS is one of the most profitable and diversified gaming operators in a duopoly market. GENS operates Resorts World Sentosa (RWS), one of Southeast Asia’s largest integrated resorts. It enjoys a strategic location in Singapore, a thriving tourism hub with strong domestic demand. The duopoly market structure supports relatively low competitive intensity.
