Excerpts from Maybank report

Genting Singapore Ltd (SGX: G13)

Beat on higher-than-expected VIP volume

Genting Singapore (GENS) 3Q23 core net profit of SGD215.5m (+63% YoY, +34% QoQ) brought 9M23 core net profit to SGD507.4m (+111% YoY) which was above our expectation at 80% of our FY estimate.

As a secondary check, 9M23 EBITDA of SGD797.8m (+54% YoY) also outperformed at 81% of our FY estimate. The outperformance was due to 3Q23 VIP volume surging c.65% QoQ to SGD11.3b, or 55% higher than we expected.

According to our records, the 3Q23 VIP volume was the highest since 2Q15.

Genting Singapore mass market also performed well

3Q23 mass market GGR also grew c.10% QoQ to SGD375m which was within our expectation. GENS stated that the growth in VIP volume and mass market GGR was broad based and not exclusively due to any one source market.

An interesting point to note is that 3Q23 VIP volume and mass market GGR have already exceeded 3Q19 levels. GENS expects operations to continue to improve as seat capacity from major source markets to Singapore continues to recover.

Raise long-term EPS estimates by 6%

Going forward, we now assume average quarterly VIP volume of SGD10.0b (SGD7.3b previously). Net impact is to raise our FY23E/24E/25E core EPS by 12%/6%/6%.

On another note, the budget for ‘RWS 2.0’ has been revised to SGD6.8b from SGD4.5b but it is now scheduled to be completed by 2031 versus 2028-2029 previously.

GENS explained that the budget revision was due to a combination of cost inflation and ‘premium-isation’ of the planned offering.

Valuation/Recommendation

Maintain BUY with higher TP of SGD1.16. VIP volume surged to an 8-year high and drove 3Q23 results to exceed our expectations. Equally, if not more importantly, mass market GGR also continues to grow after years of stagnation during pre-Covid times.

We raise our FY23E/24E/25E core EPS by 12%/6%/6% on account of higher VIP volume and raise our DCF-TP to SGD1.16 from SGD1.12. On another note, the budget for ‘RWS 2.0’ has been raised by c.50% to SGD6.8b but with a longer runway to completion.

You can find the full report here and the company website here.