Marina Bay Sands' 4Q numbers likely troughed, inspires Maybank to call "hold" on Genting Singapore

Genting Singapore is likely to go ahead with its $4.5 billion expansion plan

Maybank Securities analyst Yin Shao Yang has kept his “hold” call on Genting Singapore, on expectations that rival Marina Bay Sands’ recently reported quarterly numbers is a “good portent” that Genting Singapore’s own earnings, yet to be reported, have troughed.

In his Jan 27 report, Yin notes that MBS has reported improved q-o-q numbers, despite higher numbers of new Covid-19 cases.

“By extension, we hope Genting Singapore will report similar trends in its upcoming 4Q21 results on 17 Feb 2022,” says Yin, who has a price target of 83 cents on the stock. He does not have a call on Las Vegas Sands, the US-listed parent company of MBS.

LVS on Jan 26 reported that a loss of US$123 million for the 4QFY2021 ended Dec 31, reduced from US$299 million in the year earlier quarter. Revenue in the same period was basically flat at US$1,008 million vs US$1,015 million.

Specifically for MBS, revenue in the same period reached US$368 million versus US$345 million in the year earlier; operating profit improved to US$177 million from US$144 million. The higher earnings, according to Yin, can be attributed to a higher win rate of VIP players. Some US$70 million in government wage subsidies helped as well.

Even as the pandemic shows no sign of abating, MBS is going ahead and spend US$1 billion on renovation to expand the number of hotel rooms, as part of its overall $4.5 billion MBS2.0 programme announced back in April 2019 but subsequently delayed because of the pandemic.

“In our view, this may compel Genting Singapore to do the same with its $4.5 billion ‘RWS 2.0’ reinvestment programme,” says Yin.

As at 11.04am, Genting Singapore changed hands at 73.5 cents, down 2% thus far today.

Photo: Samuel Isaac Chua / The Edge Singapore

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