Genting Singapore Earnings: Growth Story Intact, but Cost Inflation a Risk; Shares Fairly Valued

Genting Singapore’s fourth quarter was weaker than that of peer Marina Bay Sands, but we think its operating performance is still decent—revenue well exceeded its 2019 levels, underpinned by robust recovery in tourism demand. We expect Genting Singapore to extend its growth momentum into the next five years, as visa-free travel arrangements between China and Singapore, further upticks in flight capacity from its key client markets, along with new attractions, hotel rooms and lifestyle offerings to be launched in the coming years, would help boost demand across gaming and nongaming segments. We raise our 2024-28 revenue assumptions by an average of 3%, while keeping our five-year forecasts of adjusted EBITDA and net profit largely unchanged, as rising costs—including a 1% increase in the goods and services tax from 2024—will offset the revenue improvement. As such, we keep our fair value estimate at SGD 0.98 per share. We think the shares are currently fairly valued.