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DBS: Genting Singapore – Dispelling concerns about the lack of Chinese tourists

Posted on July 22, 2022July 22, 2022 By alanyeo No Comments on DBS: Genting Singapore – Dispelling concerns about the lack of Chinese tourists
  • Marina Bay Sands or MBS (under Las Vegas Sands Corp), the only domestic peer to Genting, reported better-than-consensus numbers
    • Adjusted property Ebitda for MBS rose 184% y-o-y to US$319mil (consensus estimate US$208.6mil)
    • Rolling chip volume rose 184% q-o-q to US$5.39bil (consensus estimate $2.78bil)
  • MBS’s strong results dispel concerns that recovery for the Singapore gaming sector will be moderate due to the absence of Chinese tourists 
  • We expect Genting Singapore’s share price to stay firm ahead of its 1H22 results release on 12 August 2022
  • Share price should also be supported by the latest unsolicited bid that highlights Genting’s highly attractive valuation
    • Stock trades at a significant discount to peers, at 6.5x CY23 EV/EBITDA (peer median of 13.8x)
    • This discount is unjustified given the stark divergence between Singapore and Macau – Changi Airport’s handling capacity will return to pre-COVID level of 70mil passengers/yr by October this year whereas all Macau casinos were recently shut because of a resurgence in COVID-19 cases
  • Stock has likely found a low at $0.72 recently
    • Technical support for the stock is at $0.765, strong still at $0.75
    • We currently have a BUY recommendation with a fundamental TP of S$1.00

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Research - Equities Tags:Genting SP

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