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Booming local property market drives gaming revenues, inspiring upgrade of Genting Singapore by Maybank

The Edge Singapore
The Edge Singapore • 2 min read
Booming local property market drives gaming revenues, inspiring upgrade of Genting Singapore by Maybank
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Maybank Securities has upgraded Genting Singapore to "buy" from "hold" with evidence mounting that the mass market segment is poised to recover to a level that will be "comfortably" above the pre-pandemic levels.

"Singapore's booming property prices created a lot of wealth which we gather has been driving locally sourced mass market gross gaming revenues higher," writes analyst Yin Shao Yang in his March 20 report.

"Also, seat capacity from China to Singapore suggests that Chinese visitorship could recover to pre-Covid levels by year-end," adds Yin, who has raised his earnings estimate for the stock by between 18 and 20% and along with that, a higher target price of $1.18 from 96 cents previously.

According to Yin, the mass market for Genting Singapore is an "especially important" one because of its high EBITDA margin of more than 50%.

Yin points out that mass market gross gaming revenue for 2H2022 in Singapore has hit 104% of 2HFY2019 pre-pandemic levels.

He says this trend should not have happened because Chinese visitors, a key traditional source of visitors accounting for around a fifth of FY2019 revenue - have only returned to Singapore since Jan this year.

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"We gather that this is due to Singapore's booming property prices which created a lot of wealth and drove Singaporean's propensity to gamble," Yin reasons.

Now, with tourists from China set to return in bigger numbers, the mass market gross gaming revenue for Singapore as a whole could rise even further.

Genting Singapore, as at 3.50 pm, was changing hands at $1.06, unchanged for the day.

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