Genting Singapore: New rooms and attractions in 2H25
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Stronger 2H25 on opening of new retail stores, attractions and luxury hotel rooms
Results overview
4Q24 results above our estimates, but below consensus. Genting Singapore (GENS) reported SGD612mn revenue and SGD225mn adj. EBITDA in 4Q24, declining 5.4% and 1.1% y/y, respectively. On a q/q basis, revenue grew 9.0%, and adj. EBITDA surged 37.5%. FY24 revenue (SGD2,530mn) and adj. EBITDA (SGD960mn) exceeded our estimates by 7% and 6%, respectively, though our estimates were the lowest on the street. Compared to consensus, FY24 revenue was in line, but adj. EBITDA fell 5% short of expectations (SGD1,013mn).
4Q24 y/y revenue decline driven by gaming softness, q/q improvement on normalising win rate. While MBS saw broad-based gaming volume growth (VIP +11% y/y, mass drop +24% y/y, slots +6% y/y), RWS lagged, likely due to ongoing refurbishments. However, revenue rebounded 9.0% q/q in 4Q24 on normalising VIP win rate. This was partly offset by a 15.1% q/q decline in non-gaming revenue, likely due to increased outbound travel during the year-end holiday season.
4Q24 adj. EBITDA declined 1.1% y/y but surged 37.5% q/q. The flat y/y performance is likely due to the company scaling back VIP services. However, the strong q/q growth was driven by a normalisation of the VIP win rate from 2.5% in 3Q24 to 3.5% in 4Q24.
Final dividend of 2.0Scts, bringing FY24 total to 4.0Scts, in line with estimates. FY24 dividend rose 14.3% y/y to 4.0Scts, on a higher 85% payout ratio (FY23: 69%).
Business Outlook
No firm plans for expansion in Thailand. The company noted that Thailand’s proposed USD1.5mn deposit for locals to enter casinos would likely limit the market to foreign visitors, making the business case weak. No tenders have been released, and plans remain under government review.
Optimistic on 1Q25 but cautious for 2025. Management is pleased with YTD performance, including CNY, a peak period. However, unlike MBS, GENS remains cautious on 2025, with no plans to drive VIP volumes, as seen in 4Q24’s VIP volume slowdown q/q versus MBS' strong growth (chart below). Nonetheless, this strategy should help limit provision requirements in 2025.
Minion Land’s initial performance exceeded expectations. Open for a week, it has attracted major influencers and is expected to drive visitorship for the next 2-3 years.
Targeting 70-80% retail occupancy by Jul-25. The company recently received government approval to lease retail spaces and aims to fill 70-80% by Jul-25, focusing on high-end retail and F&B.
Capital Allocation
No major capex spike until 2027. The company is still reviewing the cost structure for the Waterfront project, with significant capex expected from 2027. Funding options (cash vs. debt) remain under evaluation.
Reiterates progressive dividend policy. Management reaffirmed its commitment to maintain at least the current dividend level, barring major disruptions (e.g., COVID-19). We remain optimistic about a higher FY25F dividend (4.5Scts, 75% payout ratio), supported by earnings growth and limited capex outflows.
Our views
Cut FY25F adj. EBITDA by 6%, increase FY26F by 5%. The hotel reopening delay (1Q25 to 3Q25) and S.E.A. Aquarium closure led us to lower our non-gaming revenue forecast from SGD1.1bn to SGD1.0bn. Margin pressure is also expected due to higher-than-anticipated operational costs due to delays and multiple openings. However, we expect costs to ease in 2026, with growth accelerating from new attractions, luxury rooms, and retail stores.
Maintain BUY with TP of SGD0.95. Near-term weakness is likely due to ongoing market share losses to MBS in VIP and mass gaming. However, valuation remains attractive, with limited downside risk supported by the progressive dividend policy (≥4.0Scts), offering a yield >5% at the last traded price (SGD0.775/share).
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