Genting Singapore Earnings: Recovery Continues, but Company Lags Peer Marina Bay Sands

Genting Singapore’s G13 first-quarter results continued to reflect a solid recovery, benefiting from the return of regional travel and gaming demand. However, its pace of recovery lagged peer Marina Bay Sands, with Genting’s revenue at 76% of 2019 levels, compared with 111% at MBS. Genting’s slower recovery was weighed down by a lower win rate, while Genting’s higher reliance on Chinese visitors has also slowed its pace of recovery as China’s international flight capacity remained at a low level in the quarter. This is largely within our expectations, and with tourism traffic and airline capacity continuing to recover—particularly the gradually normalizing travel between China and Singapore—we expect Genting to accelerate its growth in the coming quarters.

We raise our fair value estimate slightly to SGD 0.96 per share from SGD 0.94, after a minor tweak in our forecast. We expect the company’s adjusted EBITDA to rise 29% year over year to SGD 997 million in 2023 (up from SGD 935 in our earlier forecast) and grow at a five-year CAGR of 9.5% between 2022 and 2027. We think the shares are slightly overvalued as of market close on May 12.

First-quarter revenue rose 54% year over year to SGD 485 million, but fell 11% sequentially from a quarter ago, dampened by a lower win rate. Adjusted EBITDA came in at SGD 192 million compared with SGD 256 million in the prior quarter, tracking only 58% of 2019 levels. On a hold-normalized basis, we estimate Genting’s adjusted EBITDA should have returned to above 80% of 2019 levels, which still lagged peer MBS with hold-normalized EBITDA rebounding to 95% of 2019 levels. Compared with MBS, Genting has a higher portion of gaming revenue derived from VIP and premium segments, which is more reliant on Chinese visitors and is having a slower recovery due to airline capacity constraints. According to the Civil Aviation Administration of China, the international flight capacity in the first quarter was just 12.4% of 2019 levels.