Genting Singapore Earnings: Results Missed, Cutting Fair Value Estimate by 4%

Narrow-moat Genting Singapore’s 2% quarter-on-quarter decline in third-quarter revenue and 19% fall in adjusted EBITDA were disappointing, which management attributed to lower VIP rolling volume and win rate. Despite a continued rise in visitor arrivals from China, we think the increased scrutiny on cross-border gambling and the slowdown in China’s economic growth also dampen the VIP revenue outlook. We cut our fair value estimate to SGD 0.98 per share from SGD 1.02, after lowering our forecasts for 2024-28 revenue by 4%-10% and adjusted EBITDA by 5%-15%, to reflect the weaker-than-expected third-quarter performance and a more cautious growth outlook for the VIP segment. That said, we think the shares remain undervalued as we see multiple drivers to support Genting’s growth in the coming quarters.