Genting Singapore: Navigating Challenges and Opportunities

Genting Singapore (GENS) is vying for its share of the tourism-driven gaming market in Singapore. Facing stiff competition from Marina Bay Sands (MBS), the company is grappling with reduced room inventory due to ongoing renovations and a slower recovery in international visitor arrivals (IVAs).

Financial Performance

GENS is projected to report a 4Q24 adjusted EBITDA of S\$197.4 million, marking a 13.1% year-over-year decline. This subdued performance is attributed to a lower normalized win rate and reduced room inventory. Comparatively, MBS reported record-high mass gross gaming revenue (GGR) of US\$746 million (+26.9% YoY) in 4Q24, boosted by its suite renovation program.

Tourism Recovery Challenges

Singapore’s tourism recovery remains stunted, with November 2024 IVAs reaching only 80.5% of 2019 levels. GENS faces added pressure as its Hard Rock Hotel has taken 384 rooms offline for renovations, potentially deterring premium mass visitors. However, its revamped attractions, including the Hard Rock Hotel, Minion Land in Universal Studios, and the Singapore Oceanarium, are expected to drive profitability in 2H25.

Valuation and Recommendation

GENS is trading at a 12-month forward EV/EBITDA of 5.6x, a five-year low, and offers a dividend yield of approximately 5.5%. The target price remains unchanged at S\$1.05, representing a 39.2% upside from the current price of S\$0.755. The recommendation is to Add, citing potential catalysts like higher-than-expected win rates and increased tourist arrivals.

Malaysian Peers: Genting Malaysia and Genting Bhd

Genting Malaysia (GENM)

Genting Malaysia (GENM) is rated as Add, with a target price of RM3.65. The company is forecasted to deliver a three-year EPS CAGR of 44.8%, supported by a robust recovery in its gaming operations. For CY24F and CY25F, the stock trades at P/E multiples of 16.8x and 12.7x, respectively. A dividend yield of 6.7-7.4% further enhances its appeal.

Genting Bhd (GENT)

Genting Bhd (GENT) also receives an Add rating, with a target price of RM6.65. The company is projected to achieve a three-year EPS CAGR of 11.1% and trades at attractive P/E multiples of 8.2x (CY24F) and 7.7x (CY25F). The dividend yield is expected to range from 4.1% to 5.1%, making it a compelling investment option.

Korean Peers: Paradise, Grand Korea Leisure, and Kangwon Land

Paradise

Paradise is rated as Add, with a target price of KRW11,000. The company is expected to grow its EPS by 6.1% annually over three years. Trading at P/E multiples of 15.6x (CY24F) and 13.4x (CY25F), Paradise offers a dividend yield of 1.0% and EV/EBITDA multiples of 7.5x and 6.8x, respectively.

Grand Korea Leisure (GKL)

Grand Korea Leisure, another Korean gaming operator, is also rated as Add with a target price of KRW13,000. The company shows a three-year EPS CAGR of 17.4% and trades at P/E multiples of 20.4x (CY24F) and 13.3x (CY25F). The dividend yield is projected at 3.0%, while EV/EBITDA multiples stand at 8.0x and 6.6x for CY24F and CY25F, respectively.

Kangwon Land

Kangwon Land has a target price of KRW19,000 and is rated Add. Despite a -4.6% three-year EPS CAGR, the company benefits from strong dividend yields of 4.7% and EV/EBITDA multiples of 1.3x and 0.2x for CY24F and CY25F, respectively.

Global Peers: Melco Resorts, MGM Resorts, Wynn Macau, Wynn Resorts, and Las Vegas Sands

Melco Resorts & Entertainment

Melco Resorts is not rated but is noted for trading at an EV/EBITDA multiple of 7.9x (CY24F) and 7.7x (CY25F). The company faces substantial challenges, as evidenced by its three-year EPS CAGR of -712.3% and a negative dividend yield.

MGM Resorts International

MGM Resorts, also not rated, demonstrates a three-year EPS CAGR of -4.7% but offers robust dividend yields of 21.4% and 18.7% for CY24F and CY25F. The company trades at P/E multiples of 14.1x and 15.3x, respectively, and has an EV/EBITDA multiple of 3.2x for both years.

Wynn Macau Ltd

Wynn Macau trades at a P/E multiple of 11.2x (CY24F) and 10.7x (CY25F), with projected dividend yields of 2.8% and 3.1%. Despite these metrics, the company faces profitability challenges, as reflected in its negative three-year EPS CAGR of -235.8%.

Wynn Resorts Ltd

Wynn Resorts exhibits significant volatility, with a three-year EPS CAGR of -4.3%. The stock trades at P/E multiples of 17.7x (CY24F) and 16.8x (CY25F) and offers dividend yields of 1.3% and 1.7%, respectively.

Las Vegas Sands Corp

Las Vegas Sands stands out with strong growth metrics, including a three-year EPS CAGR of 23.2%. The stock trades at P/E multiples of 23.3x (CY24F) and 17.4x (CY25F) and offers dividend yields of 43.5% and 51.7%, respectively, making it a compelling choice for investors.