Genting Singapore - UOB Kay Hian 2024-08-15: 2Q24 Seasonally Softer; Slowing Recovery Pace

• We cut earnings on a slower recovery momentum despite remaining positive on Genting Singapore (SGX:G13)’s bargain valuations. Maintain BUY rating on Genting Singapore with a lower target price.
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2Q24: Weak set of results pivoting from 1Q24’s strong start.

• Resort World Sentosa (RWS) reported 2Q24 revenue of S$571m (-27% q-o-q, -4% y-o-y) and EBITDA of S$201m (- 46% q-o-q; -23% y-o-y). Earnings were weaker q-o-q mainly due to seasonally softer visitations, lower VIP hold and absence of mega events.
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Operating statistics dragged by lower visitations and normalising VIP luck factor.

• Genting Singapore's gaming revenue in 2Q24 deteriorated about 34% q-o-q and merely represented 87% of pre-pandemic level, presumably reflecting the normalisation of high-base VIP win percentage to 2.91% (2Q23: 3.95%/1Q24: 4.62%) and softer betting volume (gross gaming revenue -29% q-o-q).
• Meanwhile, non-gaming revenue fell 11% q-o-q, reflecting much lower daily available rooms of about 1186 rooms (1Q24:1451 rooms) following the closure of Hard Rock Hotel in early-March for renovations and rebranding. Meanwhile, hotel occupancy rate of 85% (1Q24: 85%) and average room rate of S$495 (1Q24: S$480) are flattish q-o-q.

Encouragingly raised interim dividend to 2 cents.

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Jack Goh UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-08-15 SGinvestors.io

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