“We estimate 1Q18 adjusted EBITDA was $297.6 million (up 5% y-o-y and up 17% q-o-q) on the back of higher FY17 average market share of 40% for both the VIP and mass markets,” says lead analyst Cezzane See in a flash note on Thursday.
See notes that GENS has also continued to maintain its cost discipline, with average trade receivable impairment at close to $9.5 million per quarter.
The report comes after GENS’s rival Marina Bay Sands (MBS) posted a 17% y-o-y decline in VIP rolling chip volumes for 1Q18.
“Lower MBS VIP volumes could imply higher market share for GENS,” See says.
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According to See, GENS’s estimated market share improved to 42% in 4Q17, from an estimated average of close to 35% in 9M17 – even as MBS saw VIP volumes falling.
This was mainly attributed to GENS loosening its credit terms for VIPs.
“1Q18 was likely a repeat of the same trend,” See says. “A key focus during GENS’s results release will be its ability to improve market share and maintain EBITDA levels, providing investors comfort.”
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Further, GENS is also expected to provide updates on the timeline for Japan casinos, with the bill still being actively debated on in Japan.
CIMB is keeping its “add” recommendation on GENS with an unchanged target price of $1.40, which is based on 11.5 times FY19F EV/EBITDA.
As at 11.25am, shares of Genting Singapore are trading flat at $1.18, implying an estimated price-to-earnings ratio of 19.5 times and a dividend yield of 2.6% for FY19.
