Maybank Securities analyst Yin Shao Yang has maintained “buy” on Genting Singapore G13 with a higher target price of $1.21 from $1.16 previously on the back of Chinese tourism revival.
In his Jan 6 note, Yin points out that mass market — which traditionally contributes about 75% of Genting Singapore’s earnings — was already hitting pre-Covid levels even before 3QFY2023 despite the lack of Chinese tourists.
“The return of Chinese tourists en masse in 3QFY2023 drove mass market gross gaming revenue to 8% above the FY2019 quarterly average and VIP volume to 36% above the FY2019 quarterly average. In fact, the 3QFY2023 VIP volume of $11.3 billion was the highest since 2QFY2015,” he adds.
The analyst expects this growth to consolidate and continue in FY2024 as seat capacity for flights from China to Singapore recovers. Citing Official Airline Guide data, Yin notes that the December 2023 seat capacity from China to Singapore currently stands at 87% of December 2019 levels.
“Singapore also recently granted 30-days visa free entry to Chinese visitors. Thus, we hope that Chinese visitation to Resorts World Sentosa (RWS) will recover completely this year. In the long term, we expect RWS VIP volume and mass market gross gaming revenue to exceed 2019 levels by about 20%,” says Yin.
Separately, Maybank also notes that Genting Singapore may jointly bid for a Thai integrated resort (IR) licence should Thailand liberalise its IR industry. While Yin acknowledges that Thai IRs are more likely to be a threat to Genting Singapore than to Genting Malaysia, historically, Genting Singapore is not averse to expanding overseas to partially stave off competition.
As at 1.40pm, shares in Genting Singapore are trading 0.5 cent lower or 0.5% down at 99.5 cents.
