Genting Singapore: A Detailed Financial Review

Genting Singapore (GENS), one of the two Integrated Resorts (IR) operators in Singapore, remains a key player in the highly regulated gaming industry. The company has been rated “Add” by CGS International, with a target price (TP) of S\$1.05, representing an upside of 39.2% from its current price of S\$0.755. Despite near-term headwinds in Singapore’s tourism recovery, the outlook for Genting Singapore remains optimistic due to its strategic initiatives and upcoming attractions.

Performance Overview

Marina Bay Sands (MBS), a key competitor, reported a record-high mass gross gaming revenue (GGR) of US\$746 million in Q4 2024, leading to a hold-adjusted EBITDA of US\$535 million. In contrast, GENS is expected to report Q4 2024 adjusted EBITDA of S\$197.4 million, a decline of 13.1% year-on-year. This underperformance is attributed to a lower normalized win rate and reduced room inventory, as 384 rooms from its Hard Rock Hotel have been offline for renovations since March 2024.

Challenges in Tourism Recovery

Singapore’s international visitor arrivals (IVAs) in November 2024 reached only 80.5% of pre-pandemic levels, signaling a stunted recovery. With fewer blockbuster events lined up in 2025, the growth in tourism-driven volume for GENS may remain subdued. However, the company seeks to counter these challenges by introducing new attractions, such as the revamped Hard Rock Hotel, Minion Land in Universal Studios, and the Singapore Oceanarium, expected to drive profitability in the second half of 2025.

Investment Recommendation

GENS is currently trading at a 5-year-low 12-month forward EV/EBITDA of 5.6x, offering a yield of approximately 5.5%. The “Add” rating is underpinned by its depressed valuations, upcoming attractions, and potential catalysts such as higher win rates and increased tourist arrivals. However, risks include delays in construction and higher bad debt recognition.

Genting Malaysia: Resilient Growth Prospects

Genting Malaysia, a peer of GENS, has been rated “Add” with a target price of MYR 3.65, reflecting a significant upside from its current price of MYR 2.23. The company is expected to experience robust growth, supported by a 44.8% compound annual growth rate (CAGR) in EPS over three years.

Financial Highlights

For 2024, Genting Malaysia is forecasted to deliver an EV/EBITDA of 5.3x and a dividend yield of 6.7%. The company is well-positioned to capitalize on strong demand in the Malaysian gaming market, bolstered by ongoing recovery in tourism and leisure activities.

Investment Outlook

With healthy financial metrics and strategic growth initiatives, Genting Malaysia offers an attractive proposition for investors. The “Add” recommendation is supported by its robust earnings trajectory and favorable market conditions.

Korean Gaming Peers: A Mixed Bag

Paradise, Grand Korea Leisure, and Kangwon Land form the key Korean gaming companies under review. Each exhibits unique strengths and challenges, presenting a diverse landscape of investment opportunities.

Paradise

Paradise has been rated “Add” with a target price of KRW 11,000, offering a modest upside from its current price of KRW 9,910. The company is projected to achieve a 6.1% CAGR in EPS over three years, with an EV/EBITDA of 7.5x for 2024.

Grand Korea Leisure

Grand Korea Leisure is similarly rated “Add” with a target price of KRW 13,000. Despite facing challenges with a -36.6% EPS growth forecast for 2024, the company offers an attractive dividend yield of 8.6%.

Kangwon Land

Kangwon Land is rated “Add” with a target price of KRW 19,000. While its EPS growth outlook is negative, the company maintains strong fundamentals, reflected in its EV/EBITDA of 1.3x for 2024.

Global Peers: A Comparative Analysis

The global gaming landscape includes notable players such as Melco Resorts & Entertainment, MGM Resorts International, Wynn Macau, Wynn Resorts, and Las Vegas Sands. These companies vary significantly in scale, profitability, and regional focus.

Melco Resorts & Entertainment

Melco Resorts faces significant challenges, with no EPS growth forecast for 2024 and 2025. The company is navigating a volatile market environment, reflected in its EV/EBITDA of 7.9x for 2024.

MGM Resorts International

MGM Resorts exhibits strong growth potential, with an 87.8% EPS growth forecast for 2025. The company is trading at an EV/EBITDA of 3.2x for 2024, highlighting its operational efficiency.

Wynn Macau

Wynn Macau continues to face headwinds, with a negative EPS growth trajectory. However, its EV/EBITDA of 6.9x for 2024 offers a glimpse of resilience in its core operations.

Wynn Resorts

Wynn Resorts has been grappling with significant challenges, reflected in its negative EPS growth and EV/EBITDA of 8.7x for 2024. The company remains a high-risk, high-reward investment.

Las Vegas Sands

Las Vegas Sands stands out with a 224.7% EPS growth forecast for 2024, supported by its robust financial metrics and strategic initiatives. The company trades at an EV/EBITDA of 10.7x, reflecting its strong market position.