Genting Singapore - Maybank Research 2023-05-15: Lucky Streak Normalised But Fundamentals Improving

• Genting Singapore (SGX:G13)'s 1Q23 EBITDA was down 25% q-o-q but it was largely due to a normalised VIP win rate. More importantly, 1Q23 gaming operations grew q-o-q thanks to the nascent return of Chinese gamblers.
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• We trim FY23E core EPS by 4%, maintain FY24E and FY25E core EPS and maintain our S$1.18 DCF-based target price for Genting Singapore.

Results largely within our expectations

• Although Genting Singapore's 1Q23 EBITDA of S$191.7m and 1Q23 core net profit of S$131.2m accounted for 16% and 17% of our full-year estimates, respectively, we rate them as within our expectations. Non-gaming revenue is seasonally weakest in the 1Q, compressing margins. We also expect gaming operations to ramp up as the year progresses on the return of Chinese gamblers.
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Gaming operating metrics encouraging, we opine

• 1Q23 EBITDA was 25% lower q-o-q largely due to VIP win rate normalising from 3.9% in 4Q22 to 2.8% in 1Q23.
• Studying the gaming statistics more closely, we estimate that Genting Singapore's 1Q23 VIP volume was up 18% q-o-q (1Q23 VIP volume market share: 40%, 4Q22 VIP volume market share: 35%) while 1Q23 mass market gross gaming revenue grew 11% q-o-q.
• We gather that the nascent return of Chinese gamblers since 8 Jan 2023 had a lot to do with the q-o-q growth.

Earnings outlook still positive, in our view

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Yin Shao Yang Maybank Research | https://www.maybank-ke.com.sg/ 2023-05-15 SGinvestors.io

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