Genting Singapore - DBS Research 2024-05-14: Lady Luck Shines Again

• Genting Singapore (SGX:G13) reported an adjusted EBITDA of S$369.5mil (+62.2% q-o-q, +92.7% y-o-y) in 1Q24, surpassing street expectations, with 1Q24 earnings accounting for about 32% of the consensus' full-year estimate.

1Q24 results above expectations due to higher gaming volumes and incredible luck factor.

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• Despite the exceptionally high VIP win rate, Genting Singapore’s adjusted EBITDA margin of 47.1% in 1Q24 only slightly exceeded our expectations, likely due to elevated bad debt losses during the period.

Net gaming revenue reaches highest level since 2Q14; non-gaming sluggish.

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• Inbound traffic from China was particularly strong during the quarter, soaring to 82% of 2019’s level in 1Q24, up from 46% in 4Q23, as visa-free travel was extended to Chinese citizens from February 2024.
• While Genting Singapore’s mass-gaming market share continues to be stable against MBS in 1Q24, the group regained significant ground in the VIP segment, and now has around a 50% share of the VIP market (1Q23: 39%).
• Non-gaming revenue of S$208.3mil was relatively flat on a sequential basis (+1.0% q-o-q), likely pressured by a lack of offerings and ongoing renovations across its various attractions and Hard Rock Hotel, which has reduced hotel inventory.

Impact of China’s warning against overseas gambling in Singapore remains uncertain, though we foresee limited downside risk.

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Jason SUM CFA DBS Group Research | https://www.dbs.com/insightsdirect/ 2024-05-14 SGinvestors.io

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