Genting Singapore likely to see better 2H
KUALA LUMPUR: Genting Singapore Ltd (GenS) may see a weaker first half in 2025 before potentially regaining traction in the second half of this year.
This is because of the lower VIP rolling win rate, as well as the temporary closure of Hard Rock Hotel for renovation and rebranding work that had impacted its first-quarter bottomlines.
Also, according to Hong Leong Investment Bank Research (HLIB Research), GenS' management had indicated that operating expenses are expected to rise in the first half due to preparations for the hotel's reopening and rebranding as well as the S.E.A. Aquarium which will be closed for 2.5 months in the first half.
'All in, we expect GenS to deliver a relatively weaker first half before regaining traction in the second half of the year,' it said.
GenS is majority 52.5% owned by Genting Bhd .
HLIB Research said tourist arrivals into Singapore will be supported by the various entertainment events such as the upcoming Lady Gaga concert and attractions.
These also include Universal Studios Singapore's new themed zone called Illumination's Minion Land, Mandai Rainforest Wild Asia, and Disney Adventure Cruise Ship; and the mutual 30-day visa exemption between Singapore and China.
GenS plans to launch The Laurus, an all-suite luxury hotel that was rebranded from Hard Rock Hotel and the Singapore Oceanarium by the third quarter of this year, it said.
It maintained a 'buy' call on GenS with a lower target price of S$1.10 from S$1.22, based on the financial year 2025's (FY25) enterprise value to earnings before interest, taxes, depreciation and amortisation multiples of nine times that is at parity to its three-year, pre-lockdown average.
'We continue to like GenS for its undemanding valuation and attractive FY25 projected dividend yields of 6.1%,' it said.
While recent results were below HLIB Research's expectations, it was in-line with Maybank Investment Bank Research's (Maybank IB) projections.
'From the third quarter, we expect operations to be stronger, thanks largely to the opening of The Laurus hotel that will house more VIP and premium mass players,' Maybank IB said.
'Going into the second quarter, we expect operations to be seasonally slower after the Chinese New Year festival in the first quarter.
'We do not get the feeling from management that the short-lived trade war between the United States and China had a marked impact on VIP volumes in the second quarter,' it added.
Meanwhile, it also highlighted Tan Hee Teck, the chief executive officer (CEO) of GenS and Resorts World Singapore, will fully retire by Nov 30, 2025.
Tan Sri Lim Kok Thay, who is presently the executive chairman of GenS will assume the role of acting CEO from June 1, 2025 while also retaining his role as executive chairman.
Maybank IB maintained its earnings estimates, 'buy' call and S$1.01 discounted cashflow target price, noting that the market is presently discounting its huge net cash pile.
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