CGS International
May 15, 2025
Genting Singapore: Poised for Growth in 2H25F with New Attractions
Genting Singapore’s 1Q25 Performance: A Brief Overview
- Genting Singapore (GENS) reported an adjusted EBITDA of S\$235.8m for 1Q25, slightly below expectations, representing 22.3% and 22.8% of CGS International’s and Bloomberg consensus’s FY25F estimates, respectively. [[1]]
- Profitability was impacted by reduced visits to Resorts World Sentosa (RWS) compared to the high base in 1Q24 and ongoing upgrading activities across the resort. [[1]]
- The opening of new attractions in 2H25F is expected to drive earnings growth, increasing footfall and improving operating leverage. [[1]]
- CGS International maintains an Add rating with an unchanged target price (TP) of S\$1.05. [[1]]
1Q25 Results: Impact of Festive Season and Upgrades
- 1Q25 revenue decreased by 20.2% year-over-year to S\$626.2m, primarily due to a decline in gaming revenue (-20.2% yoy), attributed to lower VIP rolling win rates. [[1]]
- Lower visitorship and tourism spending at RWS during the Chinese New Year festive season in 1Q25, compared to 1Q24, and reduced room inventory due to renovations at Hard Rock Hotel, contributed to a 9.5% yoy decline in non-gaming revenues. This also negatively affected the mass gaming segment, which relies on transient, casual gamers. [[1]]-[[2]]
- GENS’s adjusted EBITDA of S\$235.8m (-36.2% yoy/+4.6% yoy) resulted in a margin compression of 9.5 percentage points, likely due to operating expenses related to the upcoming Singapore Oceanarium, The Laurus (an all-suite hotel), and the WEAVE lifestyle enclave in 3Q25F. [[2]]
New Offerings in 2H25F: A Potential Tourism Boost
- Despite potential headwinds in Singapore’s tourism industry due to macroeconomic factors, the completion of upgrades at RWS in 2H25F is expected to attract more visitors. [[2]]
- Increased hotel room inventory and complementary offerings, such as the Singapore Oceanarium and new retail and dining concepts, including KA-MON and Sugarra (opened in 1Q25), are anticipated to drive visits. [[2]]
- These new attractions are expected to appeal to both tourists and locals. [[2]]
Investment Thesis: Reiterate Add Rating
- CGS International reiterates its Add rating, anticipating incremental half-over-half (hoh) improvement in profitability in 2H25F with the launch of new RWS attractions. [[3]]
- FY25F-27F estimates remain unchanged, with the TP of S\$1.05 pegged at 8x FY26F EV/EBITDA, 0.5 standard deviations below GENS’s 5-year mean, reflecting a cautious outlook on the tourism industry in Singapore. [[3]]
- GENS is seen at a valuation inflection point, currently trading at a trough valuation of 5x 12-month forward rolling EV/EBITDA. [[3]]
Catalysts and Risks
- Re-rating catalysts include better-than-expected popularity of new attractions and a regional revitalization of the travel industry boosting tourist arrivals to Singapore. [[3]]
- Downside risks include delayed opening of new attractions and softer macroeconomic conditions leading to a slow uptick in footfall after the rollout of new attractions in 2H25F. [[3]]
Key Statistics
- Current Price: S\$0.735 [[4]]
- Target Price: S\$1.05 [[4]]
- Up/downside: 43.3% [[4]]
- Market Cap: US\$6,839m (S\$8,881m) [[4]]
- Average Daily Turnover: US\$18.03m (S\$24.02m) [[4]]
Major Shareholders
- Genting Bhd: 52.7% [[4]]
- Vanguard Group: 1.4% [[4]]
- Blackrock: 1.4% [[4]]
Financial Summary
| (S\$m) | Dec-23A | Dec-24A | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Revenue | 2,418 | 2,530 | 2,646 | 3,031 | 3,173 |
| Operating EBITDA | 1,025 | 960 | 1,057 | 1,249 | 1,302 |
| Net Profit | 634.4 | 594.2 | 604.2 | 687.6 | 695.3 |
| Normalised EPS (S\$) | 0.053 | 0.049 | 0.050 | 0.057 | 0.058 |
| Normalised EPS Growth | 86.5% | (6.3%) | 1.7% | 13.8% | 1.1% |
| FD Normalised P/E (x) | 13.99 | 14.94 | 14.70 | 12.91 | 12.77 |
| DPS (S\$) | 0.035 | 0.040 | 0.040 | 0.040 | 0.040 |
Results Comparison (Figure 1)
| FYE Dec (S\$m) | 1Q25 | 1Q24 | yoy % change | 4Q24 | qoq % change | Prev. FY25F | Comments |
|---|---|---|---|---|---|---|---|
| Revenue | 626.2 | 784.4 | -20.2% | 612.2 | 2.3% | 2,645.6 | 1Q25 revenue was relatively in line at 23.7%/23.8% of our/Bloomberg consensus’ FY25F estimates. |
| Gaming | 437.5 | 576.0 | -24.0% | 415.6 | 5.3% | 1,808.2 | Gaming revenues declined 24.0% yoy in 1Q25 due to lower VIP win rates, alongside a likelihood of weaker mass gaming revenues given the lack of casual gamers among hotel guests due to ongoing renovation works at Hard Rock Hotel that had led to lower overall hotel room inventory. |
| Non-gaming | 188.5 | 208.3 | -9.5% | 196.5 | -4.1% | 835.4 | Non-gaming revenues declined 9.5% in 1Q25 due to lower visits and tourist spend within RWS. |
| Others | 0.2 | 0.1 | 18.0% | 0.2 | -5.7% | 2.0 | |
| Adj. EBITDA | 235.8 | 369.5 | -36.2% | 225.4 | 4.6% | 1,056.9 | 1Q25 adj. EBITDA was slightly below expectations at 22.3%/22.8% of our/Bloomberg consensus’ FY25F estimates. |
| Adj. EBITDA margin | 37.7% | 47.1% | -9.5% pts | 36.8% | 0.8% pts | 40.0% | 1Q25 adj. EBITDA margins compressed 9.5% pts yoy, likely |
| Net profit | 145.0 | 247.4 | -41.4% | 142.6 | 1.7% | 604.2 | 1Q25 net profit was in line at 24.9%/24.2% of our/Bloomberg consensus’s FY25F estimates. |
| Core net profit | 150.3 | 249.3 | -39.7% | 143.8 | 4.5% | 604.2 |
Peer Comparison (Figure 4)
| Company | Ticker | Recom. | Price (lcl curr) | TP (lcl curr) | Market Cap (US\$ m) | CY25F P/E | CY26F P/E | 3-year EPS CAGR (%) | CY25F ROE (%) | CY26F ROE (%) | Net Gearing (%) | Div. Yield CY25F (%) | Div. Yield CY26F (%) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Genting Singapore | GENS SP | Add | 0.735 | 1.05 | 6,809 | 14.7 | 12.9 | 4.4% | 7.2% | 8.1% | -40.3% | 5.4% | 5.4% |
| Genting Malaysia | GENM MK | Add | 1.78 | 3.65 | 2,334 | 10.1 | 8.1 | 24.0% | 7.4% | 9.0% | 50.7% | 9.3% | 10.1% |
| Genting Bhd | GENT MK | Add | 3.29 | 6.00 | 2,931 | 7.0 | 6.4 | N.A. | 5.1% | 5.4% | 21.8% | 4.6% | 4.6% |
| Paradise | 034230 KS | Add | 12,900 | 15,000 | 831 | 15.5 | 14.1 | 10.2% | 4.5% | 4.8% | 20.2% | 1.2% | 1.2% |
| Grand Korea Leisure | 114090 KS | Add | 12,820 | 14,000 | 557 | 16.2 | 14.0 | 25.0% | 11.3% | 12.6% | -34.6% | 3.1% | 3.6% |
| Kangwon Land | 035250 KS | Add | 16,970 | 19,000 | 2,549 | 11.2 | 10.5 | -8.7% | 8.1% | 8.5% | -31.3% | 5.2% | 5.6% |
ESG Analysis
- Genting Singapore received a B rating from LSEG for its combined ESG score in 2023. [[4]]
- The Singapore IR operating model is considered one of the highest standards within the global gaming industry due to stringent government regulations promoting responsible gaming. [[4]]
ESG Highlights
- Resorts World Sentosa 2.0 (RWS 2.0) Waterfront Development aims to reduce its construction footprint and enhance energy efficiency. [[4]]
- Initiatives under the RWS 2.0 project are expected to promote green infrastructure, positively impacting the hospitality industry. [[4]]
Controversies
- GENS’s controversies score of B- from LSEG was due to two fines issued in 2023 for failures in customer due diligence checks. [[4]]
- These incidents are not expected to pose systemic compliance risks, as GENS collaborates with regulators to maintain high regulatory compliance standards. [[4]]-[[5]]
- GENS has introduced a facial recognition program to screen for patrons on terrorist lists or barred patrons to support compliance efforts against money laundering and terrorism financing. [[5]]
ESG Trends
- GENS maintained a combined ESG score of B in 2023 due to the deterioration in the controversies score; otherwise, its ESG scoring would have improved to B+. [[5]]
- Potential scope for improvement exists, particularly in the Governance (G) pillar, through increased disclosures under its corporate social responsibility (CSR) strategy. [[5]]
- The company is reviewing its long-term sustainability targets for 2021 to 2030, supporting the United Nations’ Sustainable Development Goals, the Paris Climate Agreement, and the Singapore Sustainable Blueprint plans. [[5]]-[[6]]
Profit & Loss
| (S\$m) | Dec-23A | Dec-24A | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Total Net Revenues | 2,419 | 2,534 | 2,647 | 3,033 | 3,174 |
| Gross Profit | 907 | 855 | 942 | 1,098 | 1,123 |
| Operating EBITDA | 1,025 | 960 | 1,057 | 1,249 | 1,302 |
| Depreciation And Amortisation | -367 | -356 | -406 | -484 | -528 |
| Operating EBIT | 658 | 604 | 651 | 765 | 774 |
| Financial Income/(Expense) | 138 | 137 | 118 | 111 | 112 |
| Pretax Income/(Loss) from Assoc. | 4 | 5 | 0 | 0 | 0 |
| Non-Operating Income/(Expense) | 0 | 0 | 0 | 0 | 0 |
| Profit Before Tax (pre-EI) | 777 | 731 | 770 | 876 | 886 |
| Exceptional Items | -23 | -15 | 0 | 0 | 0 |
| Pre-tax Profit | 777 | 731 | 770 | 876 | 886 |
| Taxation | -165 | -152 | -165 | -188 | -190 |
| Profit After Tax | 612 | 579 | 604 | 688 | 695 |
| Minority Interests | 0 | 0 | 0 | 0 | 0 |
| Other Adjustments – post-tax | 23 | 15 | 0 | 0 | 0 |
| Net Profit | 634 | 594 | 604 | 688 | 695 |
| Recurring Net Profit | 657 | 610 | 604 | 688 | 695 |
| Fully Diluted Recurring Net Profit | 657 | 610 | 604 | 688 | 695 |
| Normalised Net Profit | 612 | 579 | 604 | 688 | 695 |
| Fully Diluted Normalised Profit | 634 | 594 | 604 | 688 | 695 |
Cash Flow
| (S\$m) | Dec-23A | Dec-24A | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| EBITDA | 1,025 | 960 | 1,057 | 1,249 | 1,302 |
| Cash Flow from Invt. & Assoc. | -4 | -5 | 0 | 0 | 0 |
| Change In Working Capital | -210 | -239 | -160 | -147 | -204 |
| Other Operating Cashflow | 135 | 185 | 201 | 211 | 222 |
| Net Interest (Paid)/Received | 143 | 141 | 118 | 111 | 112 |
| Tax Paid | -130 | -183 | -165 | -188 | -190 |
| Cashflow From Operations | 959 | 860 | 1,051 | 1,236 | 1,241 |
| Capex | -328 | -423 | -759 | -1,082 | -1,090 |
| Acq. Of Subsidiaries/investments | -59 | -34 | 0 | 0 | 0 |
| Other Investing Cashflow | -3 | 56 | 0 | 0 | 0 |
| Cash Flow From Investing | -389 | -401 | -759 | -1,082 | -1,090 |
| Debt Raised/(repaid) | -3 | -2 | 0 | 0 | 0 |
| Dividends Paid | -423 | -483 | -483 | -483 | -604 |
| Other Financing Cashflow | -59 | 0 | 0 | 0 | 0 |
| Cash Flow From Financing | -485 | -485 | -483 | -483 | -604 |
| Total Cash Generated | 84 | -27 | -191 | -329 | -452 |
| Free Cashflow To Equity | 566 | 456 | 292 | 154 | 151 |
| Free Cashflow To Firm | 570 | 460 | 292 | 154 | 151 |
Balance Sheet
| (S\$m) | Dec-23A | Dec-24A | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Total Cash And Equivalents | 3,669 | 3,588 | 3,397 | 3,068 | 2,616 |
| Total Debtors | 240 | 274 | 169 | 177 | 189 |
| Inventories | 48 | 50 | 53 | 60 | 64 |
| Total Other Current Assets | 0 | 0 | 0 | 0 | 0 |
| Total Current Assets | 3,957 | 3,912 | 3,619 | 3,305 | 2,869 |
| Fixed Assets | 4,960 | 5,075 | 5,455 | 6,079 | 6,667 |
| Total Investments | 72 | 77 | 77 | 77 | 77 |
| Intangible Assets | 132 | 110 | 84 | 57 | 31 |
| Total Other Non-Current Assets | 26 | 56 | 56 | 56 | 56 |
| Total Non-current Assets | 5,190 | 5,318 | 5,671 | 6,269 | 6,831 |
| Short-term Debt | 0 | 0 | 0 | 0 | 0 |
| Total Creditors | 566 | 572 | 510 | 590 | 623 |
| Other Current Liabilities | 193 | 179 | 179 | 179 | 179 |
| Total Current Liabilities | 759 | 751 | 689 | 769 | 802 |
| Total Long-term Debt | 0 | 0 | 0 | 0 | 0 |
| Total Other Non-Current Liabilities | 13 | 17 | 17 | 17 | 17 |
| Total Non-current Liabilities | 13 | 17 | 17 | 17 | 17 |
| Total Provisions | 183 | 165 | 165 | 165 | 165 |
| Total Liabilities | 955 | 933 | 871 | 951 | 984 |
| Shareholders’ Equity | 8,192 | 8,298 | 8,419 | 8,624 | 8,715 |
| Minority Interests | 0 | 0 | 0 | 0 | 0 |
| Total Equity | 8,192 | 8,298 | 8,419 | 8,624 | 8,715 |
Key Ratios
| Key Ratios | Dec-23A | Dec-24A | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Revenue Growth | 40.1% | 4.6% | 4.6% | 14.6% | 4.7% |
| Operating EBITDA Growth | 35.4% | (5.7%) | 11.9% | 18.1% | 4.3% |
| Operating EBITDA Margin | 41.5% | 37.3% | 40.0% | 41.2% | 41.0% |
| Net Cash Per Share (S\$) | 0.30 | 0.30 | 0.28 | 0.25 | 0.22 |
| BVPS (S\$) | 0.68 | 0.69 | 0.70 | 0.71 | 0.72 |
| Gross Interest Cover | 685.5 | 596.0 | N/A | N/A | N/A |
| Effective Tax Rate | 21.3% | 20.8% | 21.5% | 21.5% | 21.5% |
| Net Dividend Payout Ratio | 66.6% | 81.3% | 79.9% | 70.2% | 86.8% |
| Accounts Receivables Days | 25.49 | 37.22 | 30.54 | 20.80 | 21.06 |
| Inventory Days | 10.95 | 10.67 | 11.04 | 10.64 | 10.99 |
| Accounts Payables Days | 122.1 | 123.8 | 115.4 | 103.4 | 107.6 |
| ROIC (%) | 13.6% | 12.7% | 13.5% | 14.9% | 13.7% |
| ROCE (%) | 9.3% | 8.6% | 9.0% | 10.1% | 10.0% |
| Return On Average Assets | 5.54% | 4.97% | 5.25% | 6.11% | 6.06% |
Key Drivers
| Key Drivers | Dec-23A | Dec-24A | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| VIP Chip Volume (% chg) | 30.0% | -10.0% | 5.0% | 5.0% | 5.0% |
| VIP Chip Win (%) | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% |
| Mass market drop (% chg) | 29.7% | 9.8% | 8.1% | 10.6% | 5.8% |
