Dec SGD mn | 2024 | 2025f | 2026f |
---|---|---|---|
Revenue | 2,530 | 2,494 | 2,709 |
Net Profit | 579 | 578 | 698 |
Profit Gth (%) | (5.3) | (0.2) | 20.8 |
PE (X) | 15.5x | 15.5x | 12.8x |
Div Yield (%) | 5.6 | 5.4 | 6.8 |
P/BV (X) | 1.1x | 1.0x | 1.0x |
One of the most profitable diversified gaming operators in a duopoly market. GENS operates Resorts World Sentosa (RWS), one of Southeast Asia’s largest integrated resorts. It holds a prime position in Singapore, a vibrant tourism hub with a strong domestic base. The duopoly structure ensures relatively lower competitive intensity, and RWS benefits from greater business diversification (a higher proportion of non-gaming revenue) and broader geographical reach in terms of visitor source markets. These factors contribute to its typically superior EBITDA margins.
Opening of new hotel rooms, retail spaces, and Oceanarium on track for early 3Q25, to deliver a stronger 2H25. The Laurus, a 183-room luxury suite hotel under Marriott’s luxury collection, remains on schedule for a soft launch in Jul for members and a full public opening in Oct. Revamped retail spaces, now branded as The Weave, will feature exciting new-to-market concept stores designed to rival the retail experience at Marina Bay Sands. These, along with the Oceanarium, are slated to open in early 3Q25, aligning with the seasonal tourism peak. While we anticipate a softer 2Q25 due to higher promotional costs ahead of these launches, we expect EBITDA margins to improve sequentially in 2H25 with increased visitor flow to the new attractions and hotel.
Cut FY25F adj. EBITDA by 6% to SGD988mn on softer non-gaming revenue. Non-gaming revenue underperformed on weaker hotel occupancy, following last year’s high base driven by the Taylor Swift concerts. With softness in the overall hospitality industry, management is considering room rate cuts to support occupancy, prompting us to lower our assumptions for both occupancy and room rates. This led to an 18% reduction in our non-gaming revenue forecasts, though still up 2.4% y/y on an expected recovery in 2H25. Consequently, we trimmed adj. EBITDA by 7%, now reflecting a 2.9% y/y increase. We remain confident that a stronger 2H25 will offset 1H softness.
Maintain BUY with lower TP of SGD0.90 (vs. SGD0.95 previously). Our TP of SGD0.90 is based on a blended valuation framework of (i) forward EV/EBITDA of 6.5x on lower FY25F estimates, and (ii) DCF, assuming 8.5% WACC and 3% risk-free rate.
Delays in current renovation plans, further softness in tourist arrivals, and persistent below-trend win rate.
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The information herein is published by DBS Bank Ltd and/or DBS Bank (Hong Kong) Limited (each and/or collectively, the “Company”). This report is intended for “Accredited Investors” and “Institutional Investors” (defined under the Financial Advisers Act and Securities and Futures Act of Singapore, and their subsidiary legislation), as well as “Professional Investors” (defined under the Securities and Futures Ordinance of Hong Kong) only. It is based on information obtained from sources believed to be reliable, but the Company does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. The information herein is published for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. The Company, or any of its related companies or any individuals connected with the group accepts no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Company or any other person has been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The Company and its associates, their directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking or financial services for these companies. The information herein is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction (including but not limited to citizens or residents of the United States of America) where such distribution, publication, availability or use would be contrary to law or regulation. The information is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction (including but not limited to the United States of America) where such an offer or solicitation would be contrary to law or regulation.
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DBS Bank Ltd., 12 Marina Boulevard, Marina Bay Financial Centre Tower 3, Singapore 018982. Tel: 65-6878-8888. Company Registration No. 196800306E.
DBS Bank Ltd., Hong Kong Branch, a company incorporated in Singapore with limited liability. 18th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
DBS Bank (Hong Kong) Limited, a company incorporated in Hong Kong with limited liability. 13th Floor One Island East, 18 Westlands Road, Quarry Bay, Hong Kong SAR.