MBS's rolling chip volume declined 2.6% y-o-y and 0.5% q-o-q to US$8.03 billion in 1QFY2025, suggesting slowing revenue momentum for the VIP gaming segment in Singapore, says Tay.
MBS's record mass gaming revenue benefitted from the completion of its Phase 2 renovation works conducted in MBS tower 3, says Tay in an April 24 note. MBS added 217 hotel rooms (73 suites and 144 rooms) to bring total room inventory to 1,844 (775 suites and 1,069 rooms). "We believe that the higher room inventory provided MBS with better catchment for casual gamers among tourists," he adds.
Genting Singapore has not yet released details of its 1QFY2025 performance. This time last year, the Mainboard-listed company released its 1QFY2024 results on May 10, 2024.
Seeing a "muted read-through" from MBS's latest quarter, Tay is staying "add" on Genting Singapore with an unchanged $1.05 target price.
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Given extensive renovation works at Resorts World Sentosa (RWS), including the ongoing upgrading works at Hard Rock Hotel and the Forum, Tay thinks Genting Singapore could report a "more muted adjusted ebitda" of $315 million, 14.8% lower y-o-y but 39.8% higher q-o-q in 1QFY2025.
According to Tay, this is on the back of a high base in 1QFY2024, where Genting Singapore experienced higher-than-expected win rates for its VIP segment, as well as potential margin compression in 1QFY2025 as Genting Singapore ramps up operating expenses ahead of new attractions that are slated for opening in 2HFY2025.
Fewer tourists in town
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Based on data from Singapore Tourism Board (STB), 1Q2025 international visitor arrivals (IVA) declined 1.1% y-o-y, making up only 91.9% of 2019 levels.
In March, IVA of 1.3 million tourists came in at 82.9% of the corresponding period in 2019, pointing to soft tourist arrival numbers ahead, says Tay.
"While Lady Gaga will be performing four concerts in Singapore in May 2025, we think the lack of a sustained series of blockbuster concerts from internationally-renowned artists such as Taylor Swift and Coldplay in 2024 suggests that the Singapore tourism industry will see subdued volume growth in 2025," he adds.
For now, Tay is reiterating his "add" call on Genting Singapore as he expects an adjusted ebitda turnaround in 2HFY2025, with its slate of new attractions, including a newly revamped all-suite hotel in place of Hard Rock Hotel, a newly renovated Forum, as well as the Singapore Oceanarium, all due in 3Q2025.
Citi's 1QFY2025 forecast
Meanwhile, Citi Research analysts George Choi and Timothy Chau, based in Hong Kong, expect Genting Singapore to post 1QFY2025 revenue of $656 million, 16% lower y-o-y but 7% higher q-o-q.
Genting Singapore is also expected to post ebitda of $244 million, 34% lower y-o-y but 8% higher q-o-q.
The Citi analysts maintain "buy" on Genting Singapore with an unchanged $1.14 target price. "We continue to expect RWS to be one of the major beneficiaries from the Singapore-China visa-free arrangement and the solid event lineup (e.g. concerts) in Singapore."
As at 2.05pm, shares in Genting Singapore are trading 1.5 cents lower, or 2% down, at 73.5 cents. Its shares have slid 20% over the past year.
