MBS’s net revenue decreased 9% y-o-y and 10% q-o-q to US$919 million driven by its gaming sector, while VIP gross gaming revenue (GGR) dropped 63% y-o-y due to a lower VIP hold of 1.75% and an around 20% decrease in volumes.
Meanwhile, total mass market GGR grew 17% y-o-y while mass table hold rate improved to 20.4%
Choi adds that MBS’s luck-adjusted ebitda of US$484 million missed his forecast of US$508 million.
Come Genting Singapore’s results in November, he forecasts Genting Singapore to report a 3QFY2024 revenue of $581 million and an ebitda of $200 million on a luck-adjusted basis.
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“Our 3QFY2024 ebitda represents an around 42% y-o-y decline. We lower our FY2024 to FY2026 earnings forecasts by around 4% as we expect RWS to see similar operating trends versus that of MBS in 3QFY2024,” writes Choi.
Overall, Las Vegas Sands’ management believes Singapore’s operating environment remains strong and ongoing investments are sure to drive growth in FY2025 and beyond.
The analyst notes that competitor MBS has increased its capital expenditure (capex) budget for its integrated resort two to US$8.0 billion from US$3.3 billion, with piling and foundation scheduled to commence in June 2025 and an expected opening date of January 1, 2031.
“The Singapore gaming market and Genting Singapore could appeal to investors who are looking for a defensive shelter in volatile markets. Furthermore, we believe the new phase for RWS could help Genting Singapore retrieve its earnings growth,” writes Choi.
Key downside risks noted by him include VIP recovery coming in less-than-expected, government amendments to casino laws setting limits on local Singaporeans visiting casinos and lastly, higher-than-expected bad debt provision.
As at 1.27 pm, shares in Genting Singapore are trading flat at 83.5 cents.
