SHARES of Genting Singapore : G13 0% fell as much as 7.2 per cent on Monday (May 15), after its first-quarter results missed expectations for four out of five research houses.

The integrated resort operator’s shares slid to a near-two-month low of S$1.05, down 5.4 per cent or S$0.06 as at 9.06 am. By the end of the trading day, its shares had fallen further to close at S$1.03, having lost 7.2 per cent, or S$0.08. The last time Genting Singapore’s shares closed at this level was on Mar 15, 2023.

The counter was also the second most traded by volume on the Singapore bourse, with 108.2 million shares changing hands. No married deals were recorded at the time, ShareInvestor data indicated.

On Friday, Genting Singapore, which owns Resorts World Sentosa (RWS), posted a net profit of S$129.2 million for the first quarter ended Mar 31, 2023, more than triple the S$40.4 million recorded in the same period last year. This came as revenue rose 54 per cent on the year to S$484.5 million, from S$314.5 million previously.

However, the company’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) was down 25 per cent on the quarter to S$191.7 million, which missed analyst expectations.

This compared unfavourably to rival Marina Bay Sands (MBS), which posted an improvement in quarter-on-quarter adjusted property Ebitda instead, said Citi on Friday.

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“We believe this underperformance is largely due to the much more severe fall in non-gaming revenues at Resorts World Sentosa,” said Citi analysts George Choi and Ryan Cheung.

Elevated airfares during the festive seasons may have also impacted RWS’ visitor volume. In contrast, higher pricing power for MBS’ newly-renovated hotel rooms may have partially offset any negative trends during the quarter.

The analysts maintained their “buy” call, but cut their target price to S$1.26 from S$1.36. The new target implies a potential upside of 20 per cent.

Market sentiment on Genting Singapore had been fairly positive since MBS’ stellar first-quarter results, DBS Group Research said in a separate report. It said that the group’s underperformance will likely lead to share price weakness, especially since it has been holding up better than Macau peers.

Analysts have also attributed the underperformance in margins to poorer luck factor. UOB Kay Hian noted that the VIP win percentage “fell significantly” below the theoretical level, compared with the above-theoretical win percentage recorded in Q4 2022.

The research team has maintained its “buy” call and S$1.25 target price on the counter, implying a potential 19 per cent upside.

Genting’s results were largely in line with Maybank’s expectations. The research team’s outlook on Genting Singapore’s earnings remains positive as it projects seat capacity from China to Singapore to improve further by mid-2023.

“This should lower airfares and encourage more Chinese to gamble in Singapore,” said Maybank analyst Yin Shao Yang. He maintained his “buy” call and S$1.18 target, which implies a potential upside of 12.4 per cent.

CGS-CIMB expects the pace of recovery to accelerate by the end of 2023. Its “add” call and target price of S$1.26 remain unchanged, implying a potential upside of 20 per cent.

Citi said that RWS will take at least a few quarters to recover its non-gaming revenues as passenger volumes at Changi Airport continue to recover.