Genting Singapore to post flat earnings this year, analysts say

Genting Singapore could be affected by the new Omicron Covid-19 variant and a reduction in Vaccinated Travel Lane quotas.

Malaysia.- Analysts at Maybank have said that Genting Singapore could be affected by fewer passengers on the Vaccinated Travel Lane land link between Singapore and Malaysia and competition from overseas operators for quality mass gamblers.

In a research note, analyst Yin Siu Yang lowered his target price for the integrated resort operator from S$0.86 to S$0.83 after he cut his core net profit forecast by 72 per cent for FY2022 and 54 per cent for FY2023. Analysts noted that prior to the Covid-19 pandemic, Malaysians contributed 20 to 30 per cent of Resorts World Sentosa (RWS) VIP numbers and 30 to 40 per cent of its mass-market gross gaming revenue.

However, due to a reduction in the Vaccinated Travel Lane quota and ticket sales after January 20, analysts believe Genting Singapore may be affected by a drop in custom during Chinese New Year. According to Business Times, Yin also noted that a quarter of the company’s VIP market could “disappear forever” because China has passed an amendment that prohibits organising or soliciting cross-border gambling.

Analysts at Maybank expect half of RWS’s gross mass-market gaming revenue to be lost to integrated resorts in Macau, the Philippines and Cambodia. They believe the arrest of Alvin Chau Cheok Wa, CEO of Suncity Group Holdings, could prompt operators to target high-end mass gamblers who gamble regularly in Singapore.

Analysts finally noted that the Gambling Tax Act 2022 which aims to raise the tax rate operators must pay on their income could reduce the casino operators’ earnings. Singapore’s parliament has recently agreed to increase the tax rate to 18 per cent on the first SGD3.1bn (US$2.3bn) in GGR collected by casino operators.