GENTING Singapore is expected to echo its peer Marina Bay Sands’ (MBS) strong performance reported this week, ahead of the mainboard-listed integrated resort operator’s release of its own third-quarter financials in mid-November. 

In separate reports on Thursday (Oct 19), CGS-CIMB and Nomura Global Markets Research underscored Genting Singapore as an undervalued stock at its current levels as they expressed optimism for its upcoming Q3 FY2023 results.

“While VIP volume growth and win percentage between MBS and Genting Singapore can differ materially, the ongoing strong results at MBS offer a positive read-across for Genting Singapore, which operates the only other casino in Singapore,” said Nomura analysts on Thursday (Oct 19).

“We think MBS’ strong results show that underlying volume trends have not been impacted much, if at all. Based on our recent discussion with Genting Singapore’s management, volume trends in the recently concluded Q3 are also in line with their expectation. This should ease concerns on Genting Singapore, in our view.”

Nomura is projecting Genting Singapore’s rolling chip volumes, mass table drop and slot handle levels to grow 51 per cent, 30 per cent and 21 per cent year on year, respectively, for the whole of FY2023.

This growth is set to come from progressive improvement in overseas visitor arrivals from China from September’s lows, added the research house, who expects a recovery in Q4 of 2023. 

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Likewise, CGS-CIMB foresees Genting Singapore will report a similar level of quarterly growth in Q3, as it views MBS’ results as an indication of robust growth in the tourism sector.

Its analyst Tay Wee Kuang said the group’s adjusted Ebitda (earnings before interest, taxes, depreciation and amortisation) for its latest quarter could reach 107 per cent of Q3 FY2019 levels, or above pre-pandemic levels for the first time since Covid-19.

“With this, we think that Genting Singapore will be able to achieve our FY2023 adjusted Ebitda forecast of S$1 billion, especially with its stronger VIP gaming segment compared to MBS and new keys added from the newly refurbished Ora Hotel.”

Commenting on MBS’ Ebitda growth performance in Q3, Citi Research said it expects Genting Singapore’s Resorts World Sentosa to “enjoy a similar but slightly lower recovery” during the quarter, considering that the Singapore Grand Prix took place at the Marina Bay area during mid-September.

The research house said it “conservatively” forecasts Genting Singapore to report Ebitda of S$275 million for Q3, up 6 per cent quarter on quarter and largely on par with the same quarter in FY2019.

“A likely increase in dividends (from S$0.03 per share in FY2022 to S$0.04 per share in FY2023) is another reason for investors to buy this stock, in our view.” 

Genting Singapore closed at S$0.835 on Friday, up S$0.005, or 0.6 per cent.