Genting Singapore Continues To Enjoy Recovery Story in Q4, Shares Fairly Valued

Genting Singapore’s decent fourth-quarter results were in line with our expectations, which continue to reflect a solid recovery, driven by pent-up demand from gamblers in Southeast Asia, who have responded to the easing of entry restrictions to Singapore. With the tourism traffic and airline capacity continuing to recover—particularly the gradually normalizing travel between China and Singapore—we expect Singapore casinos to extend robust growth momentum in the next two years. We maintain our assumption of Genting’s gross gaming revenue returning to 90% of 2019's level in 2023, and to 110% in 2024. We raise our fair value estimate for Genting Singapore to SGD 0.94 per share from SGD 0.92, after rolling our model one year forward. Our tweaks of our forecasts are minor, and we expect the company’s adjusted EBITDA to rise 21% and 12% year over year to SGD 935 million and SGD 1.1 billion in 2023 and 2024, respectively. We think the shares are fairly valued as of market close on Feb. 22.