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