<Results Analysis> Genting Singapore (GENS SP) – 1QFY22 largely in-line

  • GENS reported adjusted EBITDA of S$121.7m in 1QFY22, down 5.0% y-o-y but up 75.4% q-o-q.
  • 1QFY22 revenue was up by 13.2% y-o-y and 20.5% q-o-q, led by recovery in both the gaming and non-gaming segments.
  • Earnings performance will improve over the next few quarters with Singapore and many countries in the region having reopened.
  • No change to earnings estimates; maintain BUY with unchanged TP of S$1.00

Our thoughts:

  • 1QFY22 EBITDA was down y-o-y despite an increase in revenue owing to higher utility costs and the absence of government support, but still largely within expectations. 
  • Tourist arrivals in 1Q22 was only at 5% of pre-COVID19 levels due to the Omicron wave. However, we expect a surge in tourist arrivals over the course of the year to 50-55% by Dec-22.
  • Singapore has eased all travel restrictions, and also lifted group capacity limits and its outdoor mask mandate. Additionally, Asia Pacific is reopening in a synchronised fashion – excluding the Greater China Market and including Japan (set to loosen border controls over the next few months), we estimate that countries that accounted for 70-75% of Singapore’s total tourist arrivals in 2019 have lifted travel restrictions. 
  • Consequently, we should see stronger earnings recovery going forward, especially in 2HFY22F. 
  • No change to our EBITDA estimates of S$665m (+48.5% y-o-y) and S$977m (+46.8% y-o-y) in FY22F and FY23F respectively. 
  • Genting Singapore’s share price performance has been trailing other reopening plays, but we believe that its robust earnings growth should catalyse a re-rating for the stock.
  • Maintain BUY with unchanged TP of S$1.00.