UOB Kay Hian Private Limited
Date of Report: Friday, 08 August 2025

Genting Singapore: Transformation Challenges Present Opportunity Amidst RWS 2.0 Rollout

Executive Summary: Short-Term Weakness, Long-Term Potential

Genting Singapore (GENS SP), recognized for its leadership in regional leisure, hospitality, and integrated resorts, is navigating a transformative period with the ongoing RWS 2.0 development. Despite reporting weaker-than-expected Q2 2025 results due to major renovations and higher operational costs, the company’s robust dividend yield and attractive valuations underpin continued confidence in its mid- to long-term growth.

Company Snapshot

• Current Share Price: S\$0.755
• Target Price: S\$0.89 (lowered from S\$0.90)
• Upside Potential: +17.9%
• Dividend Yield (2025F): ~5.3%
• Market Cap (SGD): 9,122.6 million
• Shares Outstanding: 12,082.9 million
• Major Shareholder: Genting Bhd (52.6%)

Q2 2025 Results: Impact of Renovations and Transition Costs

Headline Numbers

• Revenue: S\$588 million, down 6% qoq, up 3% yoy
• EBITDA: S\$187.9 million, down 20.3% qoq, down 6.6% yoy
• Core Net Profit: S\$98.4 million, down 34.5% qoq, down 10.7% yoy
• EBITDA Margin: 31.9%, down 5.7 ppt qoq, down 3.3 ppt yoy

Key Drivers and Observations

• Soft RWS Footfall: Major renovations, including temporary closures (notably S.E.A. Aquarium in May & June), reduced visitor numbers.
• Higher Staff Costs: Workforce increased from ~7,000 to ~8,000 following the launch of new attractions under RWS 2.0, including Minion Land and the Singapore Oceanarium.
• Ongoing Maintenance Costs: Disruptions from renovations led to ongoing maintenance expenses despite temporary closures.

Segment Analysis: Gaming vs. Non-Gaming

Gaming Segment

• VIP Rolling Chip Volume: Up 6% qoq, offsetting a lower win percentage (3.3% vs 1Q25: 3.39%).
• VIP Gross Gaming Revenue (GGR): Up 5% qoq in 2Q25.
• Mass Market GGR: Estimated 10% decline qoq, attributed to reduced property footfall and lack of festive events.

Non-Gaming Segment

• Revenue: Down 1% qoq, reflecting softer patronage and ongoing renovations.
• Hotel Operations: Daily available rooms stable at 1,189 (closure of Hard Rock Hotel since March 2024 for renovations).
• Hotel Occupancy: 73% (vs 85% in 3Q24), Average Room Rate: S\$490 (vs S\$495 in 2Q24).

Profitability and Margin Pressures

• Administrative, Selling, Distribution Expenses: Surged 34% yoy due to increased headcount and management strengthening.
• EBITDA Margin: Compressed to 31.9% in 2Q25 due to higher costs and lower operating leverage during renovations.
• Outlook: Margins are expected to improve modestly in 2H25, with greater efficiencies anticipated from 2026 as new facilities ramp up.

Dividend and Shareholder Returns

• Interim Dividend (2Q25): 2.0 S cents per share (unchanged yoy), 1H25 yield at 2.6%.
• 2025F Dividend Yield: Approximately 5.2%.
• Net Cash/Share: S\$0.27, representing 36% of market cap.

Tourism and Market Environment

• Tourist Arrivals: 1H25 arrivals at 8.3 million, up 2% yoy, reaching 89% of pre-pandemic levels.
• Drivers: Increased by mutual visa exemptions and events like Lady Gaga’s concert.
• Upcoming Events: Singapore Festival of Football (featuring Arsenal, AC Milan, Newcastle) and Formula 1 expected to boost tourism in 2H25.

RWS 2.0: Catalysts and Timeline for Non-Gaming Attractions

Major Attractions Rollout

• New Themed Zones: Minion Land at Universal Studios (opened Feb 2025).
• Singapore Oceanarium: 22 zones, over 40,000 marine animals, opened July 2025.
• WEAVE: Retail/dining precinct with 40+ international/local brands.
• The Laurus: Super-luxury all-suite hotel, opens Oct 2025 in partnership with Marriott International.
• Longer-Term: 21,243 sqm waterfront development for an additional 700 hotel rooms by 2027.

Competitive Landscape and Regulatory Developments

• Thailand’s Casino Legalisation Delay: Thai Cabinet withdrew the Entertainment Complex Bill in July, reducing the risk of new regional competition. This is viewed as a modest positive for GENS, which had considered bidding for a Thai casino license (estimated at US\$3bn).
• Improved Cash Flow: The withdrawal allows GENS to retain more cash for shareholder returns rather than capital-intensive expansion.

Financial Overview: Key Figures and Forecasts

Earnings Revision and Risk Outlook

• Forecast Reduction: 2025-26 earnings estimates cut by 7% per year to reflect higher costs and softer volumes.
• Valuation: Target price reduced to S\$0.89 (from S\$0.90), using 8x 2026F EV/EBITDA (-0.5SD below mean).
• Dividend Play: Yield remains appealing at 5.3%, supported by a strong net cash position.

Comparative Performance: Genting Singapore vs. Marina Bay Sands

Balance Sheet and Cash Flow Highlights

• Total Assets (2025F): S\$9,384 million
• Shareholder Equity (2025F): S\$8,337 million
• Net Cash Position (2025F): S\$3,166 million
• Capex (2025F-2027F): S\$900 million per annum allocated to growth
• Dividend Payments: ~S\$484-544 million per annum (2025F-2027F)

Key Metrics and Outlook

• EBITDA Margin (2025F): 37.5%
• Net Margin (2025F): 21.7%
• ROE (2025F): 6.3%
• Growth (2025F): Turnover -4.9%, EBITDA -6.1%, Net Profit -9.7%
• Leverage: Net cash to equity remains strongly negative, highlighting balance sheet strength

Conclusion: Maintain BUY on Genting Singapore

Despite near-term margin pressures from the RWS 2.0 transformation, Genting Singapore stands out as a high-quality, dividend-yielding play with significant upside potential. The phased launch of new attractions is expected to reinvigorate earnings and footfall from 2026 onwards. The company’s robust cash position, attractive valuations, and positive tourism outlook underscore continued investor appeal. Maintain BUY with a revised target price of S\$0.89.