Genting Singapore rating upgraded to “Buy”
CLSA has upgraded Genting Singapore’s rating following positive Q2 results from Las Vegas Sands.
Singapore.- CLSA has upgraded Genting Singapore’s rating from “outperform” to “buy” following the release of Las Vegas Sands’ (LVS) second-quarter results. The upgrade is a result of positive indicators from LVS’s earnings call, pointing towards a recovery in the Singapore gaming industry thanks to improving visitation rates and increased flight capacity.
CLSA analyst Sue Lin Lim said the target price remains unchanged at SG$1.26 (US$0.93). Marina Bay Sands generated a record US$432m in adjusted property earnings before interest, taxes, depreciation, and amortization (EBITDA) for the three months ending June 30. That’s a 24 per cent increase compared to pre-pandemic figures. Year-on-year adjusted property EBITDA was up 35.4 per cent, reaching US$319m.
Net revenue was up 36.2 per cent in year-on-year terms from US$679m to US$925m. The primary driving force was revenue from casinos, which rose by 29.8 per cent to US$649m.
The positive results are considered an encouraging signal for Genting Singapore, although it is expected that the latter’s recovery might take longer. CLSA believes that the return of Chinese tourists will be a crucial factor in driving tourism spending in Singapore.
Keith Tan, the tourism board’s CEO, said in January that the Singapore Tourism Board (STB) expects international visitor arrivals to reach around 12 to 14 million visitors, bringing in approximately SGD18.00bn (US$13.62bn) to SGD21.00bn in tourism receipts – around two-thirds to three-quarters of the levels in 2019.
