4Q23: Ending 2023 With A Slight Bump
Tracing MBS, GENS’ 4Q23 results reflect operational normalisation from 3Q23’s high base due to an absence of mega entertainment events and lower visitations. That said, we observed higher regional tourist arrivals and consumption moving into 2024, especially during the CNY period. We remain convinced that such a growth trend will be sustained throughout 2024, backed by intra-regional tourism ramp-up, a solid concerts pipeline, and RWS’ premiumisation. Maintain BUY. Target price: S$1.25.
RESULTS
• 4Q23: Well within our expectations, but below consensus’. Genting Singapore (GENS) reported 4Q23 revenue (-6% qoq, +19% yoy) and EBITDA (-34% qoq; -11% yoy). 2023 net profit represented 101% and 92% of our and consensus full-year forecasts respectively.
• Qoq earnings weakness attributed to absence of crowd-pulling events. We estimate that both GENS’ gaming and non-gaming volume declined qoq in 4Q23. This set of qoq weakening results charted a similar trend as Marina Bay Sands (MBS), presumably reflecting consumption slowdown and lower visitations from 3Q23. The absence of mega entertainment events such as the F1 events in 3Q23 resulted in normalisation of gaming volume on fewer VIP high rollers, besides lower hotel and F&B contributions. To note, Singapore’s 4Q23 total visitor arrivals of 3.47m declined about 10% qoq and merely represented around 73% of 2019’s.
• Sustaining final DPS of 2 S cents, full-year payout ratio of about 70%. GENS declared a 2 S cent final DPS (4Q22: 2 S cents). Together with the 1.5 S cents interim DPS declared in 2Q23, this brings GENS’ 2023 DPS to 3.5 S cents (2022: 3 S cents) and implies a fullyear yield of 3%.
